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Accounting For Financial And Managerial Causes Of Short‐Term Pressures In British Corporations

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  • Istemi Demirag
  • Andrew Tylecote
  • Ben Morris

Abstract

Short‐term pressures are defined and a distinction drawn between external S‐TP, mainly from shareholders, and internal S‐TP, from top management. A conceptual framework for analysing S‐TP is developed and empirical evidence for their existence reviewed. Although certain crude formulations of the argument for short‐termism are rejected, evidence is found for the existence of both types of S‐TP in the UK. Variations in their intensity among sectors can be accounted for partly by inherent differences in technology, and partly by differences in the behaviour of firms. Excessive diversification, particularly by acquisition, exacerbates S‐TP.

Suggested Citation

  • Istemi Demirag & Andrew Tylecote & Ben Morris, 1994. "Accounting For Financial And Managerial Causes Of Short‐Term Pressures In British Corporations," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 21(8), pages 1195-1213, December.
    • Handle: RePEc:bla:jbfnac:v:21:y:1994:i:8:p:1195-1213
    DOI: 10.1111/j.1468-5957.1994.tb00371.x
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    References listed on IDEAS

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