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

Mariassunta Giannetti · Xiaoyun Yu

58 citations0/0 files storedManagement Science

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Financial Markets and Investment Strategies Firm Innovation and Growth

Abstract

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. This paper was accepted by Gustavo Manso, finance.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 58 citations exist upstream.

References

2005The economic implications of corporate financial reporting 2003Corporate Governance and Equity Prices 1990Additional evidence on equity ownership and corporate value 1989Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior 2001Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking 2007Monitoring: Which institutions matter?2008Zombie Lending and Depressed Restructuring in Japan 2000Corporate Disclosure Practices, Institutional Investors, and Stock Return Volatility

Cited by

2020Institutional Investors and Corporate Governance 2022A Critique of the Agency Theory Viewpoint of Stock Price Crash Risk: The Opacity and Overinvestment Channels 2021Institutional Ownership and Firms’ Thrust to Compete 2024The short-termism trap: Catering to informed investors with limited horizons 2022The Wall Street stampede: Exit as governance with interacting blockholders 2023

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.