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Dear colleagues,

Please join us in our symposium with Rebecca Henderson, Judy Samuelson, and Todd Zenger on "Corporate Short-termism and Strategy: Causes and Consequences". Details are below.

We look forward to seeing you at the AoM!

Best,

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Date: Monday, Aug 8 2016
Time: 1:15-2:45PM
Location: Hilton Anaheim in Mezzanine 10
Program Session: 1155 | Sponsors: BPS, ONE, TIM
 
Symposium "Corporate Short-termism and Strategy: Causes and Consequences"
with Rebecca Henderson, Judy Samuelson, Todd Zenger, Rachelle Sampson, and Caroline Flammer
In recent years, there has been increased focus on corporate short-termism by firms and academics alike. Concerns have been raised that US firms are increasingly focused on managing quarterly earnings at the expense of investments in sustained, long-term growth. Survey based evidence (e.g., Graham, Harvey and Rajgopal 2005) as well as large scale empirical studies have shown that firms do forgo profitable investments in order to make earnings targets (e.g., Bushee 1998; Asker, Farre- Mensa and Ljungqvist 2014). In this symposium, we include three papers that: (1) document the short-termism phenomenon in the US over the past 25 years; (2) examine firms' long-term strategies in times of short-term macroeconomic disturbances; and (3) identify challenges in valuing unique or complex strategies that may lead firms to opt out of public capital markets and instead seek longer-term financing from private equity investors. We plan a broad discussion following the presentations, with Rebecca Henderson (Harvard Business School), a leader in research on strategic implications of firm choices, including short-term focus, and Judith Samuelson (Aspen Institute), Executive Director of the Business and Society Program at the Aspen Institute. Ms. Samuelson is responsible for the creation of the "Aspen Principles," a set of guidelines to spotlight short-termism in business and capital markets and promote long-term focus. These discussants will not only discuss the implications of the presented papers for further research as well as for firms, but also engage in a broader discussion around optimal firm strategies and policy to combat corporate short-termism.

Evidence and Implication of Short-termism in US Capital Markets: 1982-2013
Presenter: Rachelle Sampson (U. of Maryland), Yuan Shi (U. of Maryland)

The Dog that Didn't Bark: Long-Term Strategies in Times of Recession
Presenter: Caroline Flammer (Boston U.), Ioannis Ioannou (London Business School)

Reflections on the Lemons Problem in Markets for Strategy
Presenter: Todd Zenger (U. of Utah)

Discussants: Rebecca Henderson (Harvard U.) & Judy Samuelson (Aspen Institute)