Noe, Thomas (1994) Shareholder myopia and managerial opportunism. In: Financial Management Association Annual Conference, 18 October, 1994, Saint Louis, Missouri.Full text not available from this repository.
It is generally acknowledged that myopic investment policies are one of the pressing problems facing U.S. industry. This paper provides a rationale for such myopic investment policies based on managerial opportunism and the allocation of control rights between shareholders and managers. In the analysis, shareholder myopia is a rational response to the hold-up problem engendered by the ability of managers to opportunistically exploit their capacity to generate firm- specific rents. Active shareholder control of the firm's policies exacerbates this myopic tendency. In contrast, when shareholder control is weak, the hold-up problem can mitigate investment distortions.
|Item Type:||Conference or Workshop Item (Paper)|
|Keywords:||Myopic investment policies; Control rights; Managerial opportunism|
|Centre:||Faculty of Finance|
|Date Deposited:||07 Jun 2012 08:39|
|Last Modified:||23 Oct 2015 14:07|
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