Is Corporate Short-Termism on the Rise in the U.S.?

Corporate short-termism has been much discussed over the past few decades, but has recently become a growing concern for the U.S. economy. Executives and politicians warn of increased market pressure on corporations to meet short-term performance metrics at the expense of long-term value creation and sustainable growth. Sheila C. Bair, former chair of the FDIC, lamented in an op-ed piece that efforts to prevent the financial crisis “were impeded by the culture of short-termism” in both the financial and political arena.

Some empirical evidence is consistent with these concerns; surveys of executives, analyses of firm investments, and various anecdotes point … Read more