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Culture and its effect on management myopia and financial performance : A comparison of firms from short-term and long-term oriented cultures

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  • Culture and its effect on management myopia and financial performance
  • Shah, Abhay
  • Journal of International Business and Economy


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Title Culture and its effect on management myopia and financial performance
Similar Titles
Sub Title

A comparison of firms from short-term and long-term oriented cultures

Material Type Articles
Author(English)

Shah, Abhay

Publisher

[Seoul]:Journal of International Business and Economy

Date 2014
Journal Title; Vol./Issue Journal of International Business and Economy:vol. 15(no. 2)
Pages 21
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Original Format pdf
Subject Economy < Financial Policy
Holding JIBE

Abstract

Myopic management has been defined as making decisions based on short-term profitability as opposed to the long-term value. Myopic firms typically cut expenditures in advertising and R&D which result in the destruction of the long-term value of the firm. This paper reports the findings of a study that investigated the impact of culture on myopic management, i.e., do firms from cultures that are shortterm oriented behave more myopically than firms from cultures that are long-term oriented? The findings support the hypotheses that firms from long-term oriented cultures spend more on R&D and advertising than firms from short-term cultures which then translates to higher profitability for firms from long-term oriented cultures in comparison to firms from short-term oriented cultures.