Professor Rachelle Sampson

Research: Short-term Thinking in U.S. Markets

on January 24 | in Economics, Strategy | by | with No Comments

Short-termism, or “quarterly-capitalism” as it is sometimes called, refers to the pressures public companies often face to return big profits as quickly as possible. While this way of thinking provides an instant win for shareholders, it can lead to systemic problems down the road. Companies put less attention into employee training, research and development (R&D), and the long-term cost of strategies such as outsourcing or environmentally unfriendly practices. As the race to return higher profits to shareholders intensifies, the well-being of the economy hangs in the balance.

In the first study to demonstrate economy-wide, firm-level evidence of increased short-termism and the implications for investment behaviors, “Evidence and Implications of Short-termism in U.S. Public Capital Markets: 1980-2013,” authors Rachelle Sampson, visiting associate professor of strategy at Georgetown’s McDonough School of Business and Yuan Shi, researcher at University of Maryland’s Smith School of Business show the shift to short-termism over the last 30 years.

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