Companies obsessing over the "long term" can be just as toxic to their value as the ones only looking at next week.
March 18, 2026
Original Paper
Short-Termism and Long-Termism across Enterprise
SSRN · 6412459
The Takeaway
Corporate law is currently obsessed with preventing managers from chasing quick, short-term profits at the expense of the future. This study flips that narrative, revealing that managers frequently sacrifice company value to pursue long-term goals that are actually destructive, suggesting that current regulations are focused on the wrong timing problem.
From the abstract
Short-termism is the popular villain of U.S. corporate governance. Critics argue that company management adopts excessively short time horizons, opportunistically sacrificing long-term value for short-term profits. The costs of these tradeoffs are thought to be massive, and substantial core areas of corporate law and regulation are devoted to addressing it. <br><br>Puzzlingly, however, attention focuses only on publicly traded corporations. These firms are not the exclusive, the most common, or