Adapting to Radical Change: The Benefits of Short-Horizon Investors

• 成果类型: Article
• 署名作者: Giannetti, Mariassunta; Yu, Xiaoyun
• 署名单位: Stockholm School of Economics; Centre for Economic Policy Research - UK; European Corporate Governance Institute; Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3702
• 发表日期: 2021
• 页码: 4032-4055
• 关键词: Short-termism; investor horizons; tariff cuts

摘要

We show that, following shocks that change an industry's competitive environment, firms with more short-term institutional investors experience smaller drops in sales and investment and have better long-term performance than similar firms affected by the shocks. To do so, these firms introduce new products, file more trademarks, intensify their innovation efforts, conduct more diversifying acquisitions, and have higher executive turnover in the aftermath of the shocks. Our findings suggest that firms with more short-term investors adapt better to the new competitive environment. Endogeneity of institutional ownership and other selection problems do not appear to drive our findings.