Are Founder-Led Firms Less Susceptible to Managerial Myopia?

Considerable evidence suggests that CEOs often behave myopically. It is open to debate, however, whether managerial myopia is equally prevalent among founder-led firms. Drawing on agency theory and stewardship theory, we analyze whether founder-led firms are less likely than nonfounder-led firms to cut R&D expenditures in order to meet the short-term earnings goals suggested by these firms’ past performance histories. Our analysis of Standard & Poor’s 1,500 companies from 1992 to 2013 indicates that myopia is an enduring phenomenon and prevalent among very large companies. However, founder-led firms are less likely than nonfounder-led firms to exhibit myopic behavior.


Publication Date:
Oct 28 2018
Date Submitted:
Jul 10 2019
ISSN:
1042-2587
Citation:
Entrepreneurship Theory and Practice




 Record created 2019-07-10, last modified 2019-07-12

postprint:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)