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The purpose of this study is to examine the impact of managerial short-termism on green innovation of firms and the moderating role of digital transformation of enterprises in the association between managerial short-termism and green innovation.

This study uses data from Chinese A-share listed companies from 2001 to 2021 and employ panel fixed model and moderating effect model to examine the impact of managerial short-termism on green innovation of firms and the moderating role of digital transformation of enterprises in the association between managerial short-termism and green innovation.

The findings of this study reveal that managerial short-termism exerts negative influence on green innovation. Digital transformation enables firms to reduce the adverse effect of managerial short-termism on green innovation because digital transformation enhances information processing ability and then improves internal corporate governance and analyst coverage. Moreover, the moderating role of digital transformation is more prominent for firms with lower internal corporate governance, for firms with less analyst coverage and for non-state-owned enterprises.

This paper intends to address the following two questions: what is the impact of managerial short-termism on green innovation and what is the role of digital transformation in the two variables’ association? By using data of Chinese A-share listed companies from 2001 to 2021 and developing two individual indexes to measure managerial short-termism and digital transformation, the authors empirically test these above two questions. The results of this study indicate that: First, drawn on time-oriented theory and upper echelon theory, managerial short-termism has an adverse effect on firms’ green innovation. Second, digital transformation enables firms to reduce the negative effect of managerial short-termism on green innovation. Furthermore, the moderating mechanism tests show that the corporate governance effects of digital transformation play a supervisory role that impels managers to reduce short-term investments and promote firms’ green R&D investments, which helps to reduce the negative effect of managerial short-termism on green innovation. Additionally, the heterogeneity checks show that the moderating role of digital transformation in the relation between managerial short-termism and green innovation is more prominent for firms with lower internal corporate governance, with less analyst coverage and for non-state-owned enterprises.

This paper aims to investigate if the more stringent requirements of AASB 138, effective 1 January 2005, regarding capitalising research and development (R&D) spending could have been a catalyst for changes in managerial decisions that consequently resulted in reduced R&D spending in Australian companies.

Financial data of 31 Australian listed firms for financial years from 2001 to 2010 were used. Companies were classified as either capitalisers or non-capitalisers. A regression model was used to ascertain whether managers reduced R&D spending to manage earnings to attain short-term goals. Also, the research intensity ratios were calculated to determine trends in R&D spending of the two groups.

The pursuit of choosing short-term earnings targets to the detriment of long-term returns is referred to as short-termism. This study found a marked increase in the significance of short-termism in explaining changes in R&D of capitalisers before 2005. Furthermore, the median research intensity ratio of capitalisers declined almost three times that of non-capitalisers after the introduction of AASB 138. These findings suggest that AASB 138 could have been a catalyst for changes in managerial decisions in pursuit of short-termism, resulting in reduced R&D spending as a means to manage earnings.

This study is useful to standard setters and board of directors as it alerts them about the potential adverse effect AASB 138 might have on the survivability and competitiveness of Australian companies and hence the Australian economy.

The purpose of this paper is to review proposed methods to reduce corporate short‐termism – a private sector obsession with short‐term profit and a neglect of true long‐term value creation – via a systems thinking analytical framework.

This paper identifies five often cited causes of corporate short‐termism directly affecting managers, including: pressure from Wall Street; ill‐aligned executive compensation; arrested executive capabilities; weak corporate governance; and ill‐aligned regulatory policy. It then compares those issues to generic system archetypes, and evaluates proposed solutions by contrasting them with typical solutions relating to specific archetypes.

This study suggests a majority of the solutions are well proposed and identifies strong leverage points where managers may intervene. It also finds that several proposed solutions are susceptible to complications, especially those relating to executive compensation, board empowerment, and regulatory structures. It also notes several additional points of leverage not yet fully explored, especially relating to deterring shareholder pressure and executive compensation structures. Finally, it suggests too little attention is being given toward a culture supportive of short‐termism, and argues that emphasizing solutions that engage stakeholders is important for sustained success.

For managers seeking to reduce corporate short‐termism, this paper suggests several key levers that may be used to intervene within their environment.

Few works have tested system‐wide solutions to corporate short‐termism using a system thinking foundation. This original work fills that unmet need.

The purpose of this paper is to highlight a fundamental issue that is preventing mankind to act rationally toward more environmentally benign technology. Moreover, the paper aims to provide a basis for further research into what might be labeled as behavioral environmental management whose purpose is to focus on what can be achieved by changing systems to induce the right behavior in people.

Using literature review and building up the case logically is the main avenue of research. There are still no case studies available.

The main findings are that there are indeed significant behavioral problems induced by herding and short-termism currently embedded in the economic system. Unfortunately, there are no easy ways to solve this problem. Ways need to be found for impacting the behavior of people.

While the review on herding and short-termism is based on significant publications, there is always the risk of passing the wrong judgments concerning such complex issues that are so ingrained in the economic system. This said, given that the purpose of this paper is not so much to provide answers as it is to provide questions, and in that context it is safe to assume that any research limitation will have little impact so far.

The originality of the paper, and hence its value, is that it focusses on something that is very prevalent in today's economic system which unfortunately is largely forgotten when the paper discusses environmental management. It is as if environmental issues are intentionally separated from economic issues, which this paper ultimately proves to be an erroneous proposition. Environmental and economic issues are probably much more interlinked than most believe.

The purpose of this paper is to examine the effect of CVS’s decision to stop tobacco sales on the company’s share price.

The paper uses event study methodology to examine the same day effect of CVS’s announcement and the one-year later effect of CVS’s announcement. Competing pharmacy retail chains’ stock performance is included for comparison purposes.

CVS’s shares fell by about one percentage point on the day of the company’s announcement while competitors’ share prices increased. A year later, however, CVS’s share price had increased by about twice as much as competitors’ share prices.

The finding that a company can make a decision that harms its short-run share price in exchange for a long-run share appreciation suggests that short-termism may not be as significant a concern as some critics of corporate management suggest.

This study examines the investment horizon influence, mediated by market optimism, on earnings management based on accruals and real activities. Based on short-termism, the authors argue that earnings management increases in optimistic periods to boost corporate profits.

The authors analyzed non-financial Brazilian publicly traded firms from 2010 to 2020 by estimating industry-fixed effects of groups of short- and long-horizon firms to compare their behavior on earnings management practices during bullish moments. For robustness, the authors used alternate measures and trade-off analyses between earning management practices.

The findings indicate that, during bullish moments, companies prioritize managing their earnings through real activities management (RAM) rather than accruals earnings management (AEM), depending on their time horizon. The results demonstrate the trade-off between earnings management practices.

This study presents limitations when using proxies for earnings management and investor sentiment.

Investors and regulators should closely monitor companies' operations, especially during bullish market conditions to prevent fraud.

The study addresses investor sentiment mediation in the earnings management discussion, introducing the short-termism approach.

For more than two decades both the business press and research in several academic disciplines have seen an extended debate over what has been called “myopia” or “short‐termism”. These terms have been used to describe decisions in which firms pursue short‐term gains ( for example, seeking to maximize quarterly profits) at the expense of long term strategies ( for example, investing in basic research or laying the groundwork for new core competencies). Despite the attention to this subject, there remain conflicting positions in the business press and inconclusive evidence from research regarding causes and proposed solutions. This paper proposes that progress may be possible by looking inside firms – addressing how managerial systems and decision‐making processes affect the development of long term strategies. Survey results suggest that systemic elements – organizational culture, processes, and routines – have promised in understanding why firms may undervalue the long term and pay too much attention to the short‐term. This study finds that firms are less likely to undervalue the long term when they are able to manage tradeoffs between short‐term and long term results, and create a climate of trust that allows individuals to weather the short‐term setbacks necessary to achieve long term results.

The temporality of performance measurement systems has been claimed to affect actors’ time orientation, such as that of listed company managers. The purpose of this paper is to explore this view.

The study uses constructivist data gathered from executives in one listed and one non-listed company.

The study shows that the research on performance measurement is based on a linear-quantitative view on time that assumes that humans orient towards the future from one point, the present; this view excludes other time-related constructs, particularly the past, and highlights a choice between the short term and the long term, idealising the long term. It is shown that the performance measurement of non-listed company executives is constructed through past-based, present-based and future-based rationalities: executives acknowledge the past as a basis for present and future performance, present actions as shaping future performance and future plans and performance targets as bases for present actions. Listed company executives’ performance measurement is constructed predominantly through the present-based time rationality.

“The orientation from the present” and the “short” and “long terms” could be enhanced with time rationalities.

The evaluation periods within performance measurement systems do not determine the time orientations of the actors subjected to those systems; time rationalities could be considered when designing such systems.

The paper provides a novel view on performance measurement and time.

This study aims to examine the real effects of financial misconduct on corporate innovation.

The authors use a sample of Chinese A-share listed firms from 2006 to 2017. This study uses several empirical strategies to deal with endogeneity concerns, including Heckman’s two-stage correction approach, propensity score matching and instrumental variables.

The authors’ findings consistently show that financial misconduct impedes corporate innovation. Furthermore, the authors’ analysis demonstrates that the negative impact of financial misconduct is more pronounced in nonstate enterprises. The authors also show that financial misconduct discourages innovation through information, short-termism and financing channels.

This paper is of particular interest to policymakers, as firm behavior is heavily regulated and altered by securities laws and regulations over time. The authors recommend firms to observe financial regulatory laws to promote capital market integrity and enhance shareholder value through innovation projects. The authors also recommend that regulators provide incentives that encourage corporate transparency and use new technologies to detect financial misconduct quickly.

Few studies in literature investigate the real consequences of financial misconduct on firm investments. Hence, this paper fills this gap by analyzing the implications of financial misconduct on corporate innovation. This study is one of the first to provide new insights into the adverse effects of financial misconduct on firm-level innovation, supported by empirical evidence.