Missing The Target: Why Stock Market Short-Termism Is Not The Problem
A data-driven argument for why stock-market short-termism is not causing severe damage to the American economy
According to many political leaders, pundits, and corporate lawmakers, stock-market-driven short-termism—when corporations prioritize immediate results in the next quarter over their longer-term interests—is harming the American economy. This view, popular in influential circles, sees short-termism as causing sharply declining research and development (R&D), too many stock buybacks, and severe environmental harm. But the data fits badly with this view of stock market short-termism
Mark J. Roe is the David Berg Professor of Law at Harvard Law School, where he teaches courses on corporate law, corporate finance, and corporate bankruptcy. Much of his research investigates how political forces shape, and are shaped by, the large corporation. The final chapters of Missing the Target: Why Stock Market Short-Termism Is Not the Problem do the same, pointing to why it’s politically convenient for key groups and leaders to assess stock market short-termism as more pernicious than it is.