Short-selling pressure and workplace safety: curbing short-termism through stakeholder interdependencies

Qian, C, Crilly, D, Lin, Y, Zhang, K and Zhang, R (2023) Short-selling pressure and workplace safety: curbing short-termism through stakeholder interdependencies. Organization Science, 34 (1). pp. 358-379. ISSN 1047-7039 OPEN ACCESS


We advance a multi-stakeholder framework that highlights the influence of stakeholders in tempering short-termist responses to capital market pressures. When firms face pressure from short sellers in the capital market, they sometimes shift attention to short-term stock performance and neglect critical investments that pay off in the long run. Relying on a quasi-natural experiment and establishment-level data on workplace injuries, we find that short-selling pressure causes an increase in employee injuries. Critically, however, the degree to which the response is short-termist depends on the salience of multiple stakeholders (analysts, shareholders, employees, and managers). We discuss the implications for understanding firms’ relations with their stakeholders and, particularly, how these stakeholders influence corporate responses to capital market pressures in ways that matter for long-term value creation. This study also contributes to strategy research by highlighting the downside of capital market deregulation.

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Item Type: Article
Subject Areas: Strategy and Entrepreneurship
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© 2022 INFORMS

Date Deposited: 14 Mar 2022 11:26
Date of first compliant deposit: 14 Mar 2022
Subjects: Health and safety
Investment and growth
Last Modified: 23 Apr 2024 01:48
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