Publications
Publications
- June 2021
- European Financial Management
Short-Termism, Shareholder Payouts, and Investment in the EU
By: Jesse M. Fried and Charles C.Y. Wang
Abstract
Investor-driven "short-termism" is said to harm EU public firms' ability to invest for the long term, prompting calls for the EU to better insulate managers from shareholder pressure. But the evidence offered—rising levels of repurchases and dividends—is incomplete and misleading, as it ignores large offsetting equity issuances that move capital from investors to EU firms. We show that, over the last 30 years and the last decade, net shareholder payouts have been moderate, and investment and cash balances have increased. In sum, the data provide little basis for the view that short-termism in the EU warrants corporate governance reforms.
Keywords
Short-termism; EU; Payout Policy; Innovation; Investment; Corporate Governance; Investment Return; Acquisition; European Union
Citation
Fried, Jesse M., and Charles C.Y. Wang. "Short-Termism, Shareholder Payouts, and Investment in the EU." European Financial Management 27, no. 3 (June 2021): 389–413.
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