Researchers develop new method to help investors predict firms decision-making, optimize portfolios and generate greater returns [Video]

Newswise — Top management teams at most businesses are charged with maximizing shareholder wealth, making any actions that impede this goal their sole responsibility.

However, these management teams are often pressured to skirt normal business practices in order to meet earnings thresholds. One way is through myopic marketing spending — reducing marketing as well as research and development expenses to boost earnings, which increases short-term results at the expense of long-term performance.

New research from the University of Notre Dame introduces a novel method to help investors predict myopic marketing spending up to a year in advance, giving investors ample time to optimize their portfolios and generate much better returns.

A survey of 500 global executives, conducted jointly by the nonprofit Focusing Capital on the Long Term and McKinsey, found that top management teams continually feel pressured to meet near-term earnings targets at the expense of long-term strategies. They make …