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

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  • Hwan Joo Seo
  • Sung Jin Kang
  • Yong Jun Baek

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.

Suggested Citation

  • Hwan Joo Seo & Sung Jin Kang & Yong Jun Baek, 2020. "Managerial myopia and short-termism of innovation strategy: Financialisation of Korean firms," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 44(6), pages 1197-1220.
    • Handle: RePEc:oup:cambje:v:44:y:2020:i:6:p:1197-1220.
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    File URL: http://hdl.handle.net/10.1093/cje/beaa023
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    Cited by:

    1. Hui Wang & Shu Xu, 2022. "Heterogeneity Effect of Corporate Financialization on Total Factor Productivity," Sustainability, MDPI, vol. 14(11), pages 1-17, May.
    2. Tingyu Yang & Yongmei Cui & Rui Li, 2023. "Exploitation or Exploration? Managerial Myopia, Economic Policy Uncertainty and Ambidextrous Innovation Investment," Sustainability, MDPI, vol. 15(9), pages 1-20, April.

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