Short-term expectation in listed firms: The effects of different owner types

Tor Brunzell, Eva Liljeblom, Mika Vaihekoski

Research output: Contribution to journalArticleScientificpeer-review

4 Citations (Scopus)


We report empirical evidence in line with the disciplining role of different institutional and other owner types in reducing managerial myopia. Using data from a large Nordic survey, we find that companies, to a reasonably high degree, feel that external pressure for a good result in the short-term generates conflict with the company’s long-term goals. We test for the effect of different ownership types and find that especially in firms with a large and non-transitory activist or fund as an owner, the perceived pressure for shortterm actions is reduced. In addition, we observe a negative association between firmprofitability and short-term pressure, and we find that younger managers feel significantly more pressure. Firms subject to greater pressure engage in more actions to accommodate that pressure. Again, the impact of a large activist owner is especially beneficial because such firms significantly less often undertake actions that have the potential to destroy value, such as deprioritizing their long-term investments or R&D.
Original languageEnglish
Peer-reviewed scientific journalJournal of International Financial Management & Accounting
Issue number3
Pages (from-to)223-256
Publication statusPublished - 02.09.2015
MoE publication typeA1 Journal article - refereed


  • 512 Business and Management
  • Short-termism
  • Owner types


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