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RESEARCH ON INSTITUTIONAL INVESTORS AND CORPORATE SHORT TERMISM: A CHRONOLOGICAL REVIEW OF FOUR DECADES OF DEBATE
SAED AHMED SULUB1, ZALAILAH SALLEH2, HAFIZA AISHAH HASHIM3.
While the pursuing of short-term goals is a strategic necessity for firms, it becomes detrimental to the sustainability of business if it destroys the long-term value. Institutional Investors (IIs) ensure that corporate decisions are made for the purpose of enhancing firm’s long-term value. The literature on the role of IIs in combating Corporate Short-termism (CS) is, however, inconclusive. In order to synthesize the seemingly scattered literature for future researchers and academicians, this paper aims to review previous studies on the relationship between IIs and CS in the period from 1988 to 2018. We assess and present CS measurements and relevant theories. Based on our review, we categorize the findings of previous research into two different categories. While the first category of studies supports that IIs discourage firms from CS, others found that IIs induce CS. Under each category, we chronologically review the empirical findings. In aggregate, we find that majority of previous studies support the view that IIs are sophisticated and long-term oriented. However, the restriction of the debate to the US and other few emerged economies implies the necessity of providing evidence from emerging economies, which emanates from the detrimental impact of short-termism on stakeholders and the already fragile developing economies
Affiliation:
- Universiti Malaysia Terengganu, Malaysia
- Universiti Malaysia Terengganu, Malaysia
- Universiti Malaysia Terengganu, Malaysia
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Indexation |
Indexed by |
MyJurnal (2021) |
H-Index
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4 |
Immediacy Index
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0.000 |
Rank |
0 |
Indexed by |
Scopus 2020 |
Impact Factor
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CiteScore (0.9) |
Rank |
Q3 (Geography, Planning and Development) Q4 (Pollution) Q4 (Management, Monitoring, Policy and Law) |
Additional Information |
SJR (0.175) |
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