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Short-Termism as a Rule : the Effects of Portfolio Management Delegation

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  • Sabine Montagne

Abstract

[eng] Because of their governance, investors are not able to develop long-term investment policies. While they have been outsourcing investment decision making to asset management firms and evaluation to intermediaries (consulting firms and credit raring agencies), they have contributed to the creation of markets of providers which are dominated by the logic of short-term profit. The dictates of performances comparison and competition have fostered evaluation of providers through synthetic indexes. These provide an abstract representation of economic activity that hinders alternative representations, specific to long-term investors. These various practises have been institutionalized into legitimate norms hard to be challenged. . JEL Classification : G20, G23, G24, L14, L22

Suggested Citation

  • Sabine Montagne, 2009. "Short-Termism as a Rule : the Effects of Portfolio Management Delegation," Revue d'Économie Financière, Programme National Persée, vol. 9(1), pages 381-395.
    • Handle: RePEc:prs:recofi:ecofi_1767-4603_2009_hos_9_1_5522
    DOI: 10.3406/ecofi.2009.5522
    Note: DOI:10.3406/ecofi.2009.5522
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    1. repec:dau:papers:123456789/1499 is not listed on IDEAS
    2. Josef Lakonishok & Andrei Shleifer & Robert W. Vishny, 1992. "The Structure and Performance of the Money Management Industry," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1992 Micr), pages 339-391.
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    More about this item

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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