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

Hwan Joo Seo; Sung Jin Kang; Yong Jun Baek

doi:10.1093/cje/beaa023

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

Hwan Joo Seo, Sung Jin Kang, Yong Jun Baek

Department of Economics

Research output: Contribution to journal › Article › peer-review

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.

Original language	English
Pages (from-to)	1197-1220
Number of pages	24
Journal	Cambridge Journal of Economics
Volume	44
Issue number	6
DOIs	https://doi.org/10.1093/cje/beaa023
Publication status	Published - 2020 Nov 1

Keywords

Financialisation
Innovation strategy
Korean firms
Managerial myopia
Radical innovation
Short-termism

ASJC Scopus subject areas

Economics and Econometrics

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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 = "Financialisation, Innovation strategy, Korean firms, Managerial myopia, Radical innovation, Short-termism",

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T2 - Financialisation of Korean firms

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AU - Kang, Sung Jin

AU - Baek, Yong Jun

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Y1 - 2020/11/1

N2 - 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.

AB - 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.

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KW - Innovation strategy

KW - Korean firms

KW - Managerial myopia

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KW - Short-termism

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

Abstract

Keywords

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