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

Hwan Joo Seo, Sung Jin Kang, Yong Jun Baek

Research output: Contribution to journalArticlepeer-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 languageEnglish
Pages (from-to)1197-1220
Number of pages24
JournalCambridge Journal of Economics
Volume44
Issue number6
DOIs
Publication statusPublished - 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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