Electronic Thesis and Dissertation Repository


Doctor of Philosophy




Tima Bansal


Corporate short-termism is one of the most significant concerns facing companies and society today. It demands that companies maximize profits in the short term regardless of the long-term consequences. Corporate short-termism can destroy long-run wealth generation, fuel job lay-offs, impede innovation, and neglect society’s social and environmental interests. Paul Polman, CEO of Unilever, declares that short-termism, “lies at the heart of many of today’s problems.”

In spite of the potential harm it may cause, corporate short-termism is one of least understood topics in management research. Anecdotal evidence suggests that financial market pressures fuel corporate short-termism, but little research has explored this claim. Difficulties of measuring and empirically testing short-termism have contributed to this limited work. In my dissertation, I develop a new measure of organizational time horizons to test the presence of short-termism in companies. I then apply this measure to answer the question: What are the causes and consequences of corporate short-termism?

In three essays, I postulate that financial markets affect organizational time horizons (Essay #1), which ultimately influence organizational-level outcomes, such as the corporate investment decisions of managers (Essay #2) and the resiliency of companies (Essay #3). I investigate these hypotheses in three empirical studies, using data on large, multinational companies across an array of industries. The methods I employ include textual analysis, difference-in-differences, two-stage least squares with instrumental variables, and survival analysis. Taken together, this body of work provides a clearer understanding of the role that financial markets have in shaping the temporal perceptions of managers, and how these perceptions affect managers’ strategic decisions and the performance of their companies.