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- Title
Short-Termism and Capital Flows.
- Authors
Fried, Jesse M; Wang, Charles C Y
- Abstract
From 2007 to 2016, S&P 500 firms distributed $7 trillion via buybacks and dividends, over 96% of their aggregate net income, prompting claims that "short-termism" is impairing firms' ability to invest and innovate. We show that, accounting for both direct and indirect equity issuances, net shareholder payouts by all public firms during this period totaled only 41% of net income. And, during this decade, investment substantially increased while cash balances ballooned. In short, S&P 500 shareholder-payout figures cannot provide much basis for the notion that short-termism has been depriving public firms of needed capital. Received September 23, 2018; Editorial decision November 13, 2018; Editor Andrew Ellul
- Subjects
STOCKHOLDERS; INVESTORS; DIVIDENDS; REDEMPTION of securities; INVESTMENTS
- Publication
Review of Corporate Finance Studies, 2019, Vol 8, Issue 1, p207
- ISSN
2046-9128
- Publication type
Article
- DOI
10.1093/rcfs/cfy011