Short-Termism and Underinvestment: The Influence of Financial Systems.
This paper contributes to the debate on the existence of short-termism in Anglo-Saxon financial systems. The authors focus on one aspect of short-termism, namely the conflict that can exist between shareholder-owners and managers. Adapting a dynamic model first presented by K. Lancaster (1973), they show that noncooperation between shareholders and managers in the division of profits leads to a suboptimal level of investment. Anglo-Saxon financial markets are characterized by short-term relationships between agents. The implication of the authors' model is that institutional reforms promoting more long-term, cooperative, relationships may provide one mechanism in alleviating short-termism. Copyright 1995 by Blackwell Publishers Ltd and The Victoria University of Manchester
Year of publication: |
1995
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Authors: | Dickerson, Andrew P ; Gibson, Heather D ; Tsakalotos, Euclid |
Published in: |
The Manchester School of Economic & Social Studies. - School of Economics. - Vol. 63.1995, 4, p. 351-67
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Publisher: |
School of Economics |
Saved in:
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