Managerial myopia and short-termism of innovation strategy: Financialisation of Korean firms

Abstract

Abstract This study empirically examines whether managerial myopia leads to short-termism of innovation strategy using Korean firm and USPTO data covering 1980–2017. The main finding is that payout indicators, as the proxy variables for financialisation and managerial myopia, have a negative effect on innovation, quantitatively and qualitatively. Hence, managerial myopia and short-termism of innovation strategy are related. Further, estimation by the firm’s size reveals that the hypothesis of managerial myopia leading to short-termism of innovation strategy is valid only for conglomerates.