Short-Term Investors, Long-Term Investments, and Firm Value: Evidence from Russell 2000 Index Inclusions

• 成果类型: Article
• 署名作者: Cremers, Martijn; Pareek, Ankur; Sautner, Zacharias
• 署名单位: University of Notre Dame; Nevada System of Higher Education (NSHE); University of Nevada Las Vegas; Frankfurt School Finance & Management
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3361
• 发表日期: 2020
• 页码: 4535-4551
• 关键词: short-term investors; long-term investments; Russell 2000 inclusions

摘要

We document that an increase in short-horizon investors is associated with cuts to long-term investment and increased short-term earnings. This leads to temporary boosts in equity valuations that reverse over time. To estimate these effects, we use difference-in-differences regressions around firms' additions to the Russell 2000, comparing firms with large and small increases in short-term ownership. We proxy for the presence of short-term investors using ownership by transient institutions. Our results suggest that short-term pressures by investors can lead to myopic firm behavior.