I don't necessarily agree the quarterly reporting system is necessarily the culprit for the focus on the short term. I think the real underlying issue is the shift of corporate ownership to large, powerful institutional owners such as hedge and pension funds. These institutional owners typically focus on near-term ROI. They exert tremendous pressure on management to meet quarterly numbers and consequently can shift management's focus to the same short-range time horizon. This often results in management making decisions that have significant downside potential over the long term to meet the near term expectations.
There are a few studies that support the idea institution ownership can have a negative impact on corporate performance over the long. There are many studies that note positive aspects as well.
On the post: Another Court Ruling In Spain Finds Personal File Sharing To Be Legal
On the post: Another Court Ruling In Spain Finds Personal File Sharing To Be Legal
Re:
On the post: Making It Easier For Startups To Cash Out
It isn't the report period causing the issue
There are a few studies that support the idea institution ownership can have a negative impact on corporate performance over the long. There are many studies that note positive aspects as well.
http://www2.bc.edu/~tehranih/TehranianInstOwner10-06-05.pdf
Next >>