Increased media exposure to layoffs and corporate quarterly financial reporting have created arguable a common perception--especially favored by the media itself--that the companies have been forced to improve their financial performance from quarter to quarter. Academically, the relevant question is whether companies themselves feel that they are exposed to short-term pressure to perform even if it means that they have to compromise company's long-term future. This paper studies this issue using results from a survey conducted among the 500 largest companies in Finland. The results indicate that companies in general feel moderate short-term pressure, with reasonable dispersion across firms. There seems to be a link between the degree of pressure felt, and the firm's ownership structure, i.e. we find some support for the existence of potentially short-term versus long-term owners. We also find significant ownership related differences, in line with expectations, in how such short-term pressure is reflected in actual decision variables such as the investment criteria used.
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Volume (Year): 117 (2009) Issue (Month): 2 (February) Pages: 427-438 Download reference. The following formats are available: HTML
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