Managerial myopia and short-termism of innovation strategy: Financialisation of Korean firms

Hwan Joo Seo, Sung Jin Kang and Yong Jun Baek

Cambridge Journal of Economics, 2020, vol. 44, issue 6, 1197-1220

Abstract: This study empirically examines whether managerial myopia leads to short-termism of innovation strategy using Korean firm and USPTO data covering 1980–2017. The main finding is that payout indicators, as the proxy variables for financialisation and managerial myopia, have a negative effect on innovation, quantitatively and qualitatively. Hence, managerial myopia and short-termism of innovation strategy are related. Further, estimation by the firm’s size reveals that the hypothesis of managerial myopia leading to short-termism of innovation strategy is valid only for conglomerates.

Keywords: Managerial myopia; Financialisation; Short-termism; Innovation strategy; Radical innovation; Korean firms (search for similar items in EconPapers)
Date: 2020
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