Are U.S. Companies Too Short-Term Oriented? Some Thoughts

24 Pages Posted: 5 Jun 2017

See all articles by Steven N. Kaplan

Steven N. Kaplan

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); University of Chicago - Polsky Center for Entrepreneurship

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Date Written: June 2017

Abstract

U.S. companies are often criticized for being overly short-term oriented. This paper documents that those criticisms have a long history, going back at least thirty-five years. The paper then considers the implications of sustained short-termism for corporate profits, venture capital investments and returns, private equity investments and returns, and corporate valuations. The paper finds little long-term evidence that is consistent with the predictions of the short-term critics.

Suggested Citation

Kaplan, Steven Neil, Are U.S. Companies Too Short-Term Oriented? Some Thoughts (June 2017). NBER Working Paper No. w23464, Available at SSRN: https://ssrn.com/abstract=2980552

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