Are U.S. Companies Too Short-Term Oriented? Some Thoughts

Steven N. Kaplan

NBER Working Paper No. 23464
Issued in June 2017
NBER Program(s):Corporate Finance Program, Productivity, Innovation, and Entrepreneurship Program

U.S. companies are often criticized for being overly short-term oriented. This paper documents that those criticisms have a long history, going back at least thirty-five years. The paper then considers the implications of sustained short-termism for corporate profits, venture capital investments and returns, private equity investments and returns, and corporate valuations. The paper finds little long-term evidence that is consistent with the predictions of the short-term critics.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w23464

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