Managerial Myopia and Corporate Sustainable Development Capabilities

Currently, the economy of China is demonstrating positive momentum. However, it also faces pressures stemming from structural adjustments and changes in the external environment. Ensuring sustainable development at the corporate level is crucial for maintaining overall economic stability and sustained growth within the nation. This paper utilizes A-share listed companies from 2007 to 2022 as a research sample and employs methods such as text analysis to measure managerial myopia, thereby investigating the relationship between managerial myopia and corporate sustainable development capabilities. The study finds a significant negative correlation between managerial myopia and corporate sustainable development capabilities, with the level of financialization of the corporate playing a mediating role: managerial myopia can lead to an increase in the level of financialization of the corporate, thereby weakening corporate sustainable development capabilities. Furthermore, internal controls and managerial incentive pay weaken the negative relationship between managerial myopia and corporate sustainable development capabilities. This paper also analyzes the degree to which managerial myopia weakens the sustainable development capabilities of enterprises with different property rights and different institutional investor shareholding ratios. It is found the detrimental impact of managerial myopia on the sustainable development capabilities of state-owned enterprises and corporate with lower institutional investor shareholding is more pronounced.