Managerial Myopia and Long-Term Investment: Evidence from China
Qilong Cao (cql1086@cczu.edu.cn),
Meng Ju,
Jinglei Li and
Changbao Zhong (zhongchangbao@cczu.edu.cn)
Additional contact information
Qilong Cao: Wu Jinglian School of Economics, Changzhou University, Changzhou 213164, China
Meng Ju: Business School, Changzhou University, Changzhou 213164, China
Jinglei Li: Business School, Changzhou University, Changzhou 213164, China
Changbao Zhong: Wu Jinglian School of Economics, Changzhou University, Changzhou 213164, China
Sustainability, 2022, vol. 15, issue 1, 1-20
Abstract:
A corporation’s ability to uphold valuable long-term investments is a critical component of the business’s sustainability. Combining the views of the upper echelons theory and agency theory, this study argues that myopic managerial behavior is detrimental to a firm’s long-term investment. We construct an indicator assessing managerial myopia based on the textual analysis approach. The moderating effect analysis suggested that the negative impact of managerial myopia on long-term investments is lessened with an increase in institutional investor ownership and analyst coverage. In addition, we found that managerial myopia negatively correlates with capital expenditures and R&D investments. Furthermore, the cross-sectional analysis suggested that the correlation between managerial myopia and long-term investment is stronger among firms with higher industry competition, poor performance levels, and in non-state-owned enterprises.
Keywords: managerial myopia; long-term investment; upper echelons theory; corporate governance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://www.mdpi.com/2071-1050/15/1/708/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/1/708/ (text/html)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2022:i:1:p:708-:d:1020965
Access Statistics for this article
Sustainability is currently edited by Ms. Alexandra Wu
More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager (indexing@mdpi.com).