Fried, JesseWang, Charles2017-01-182017-01-18Fried, Jesse M., and Charles C.Y. Wang. "Short-Termism and Capital Flows." Review of Corporate Finance Studies 8, no. 1 (March 2019): 207–233. (Was Harvard Business School Working Paper, No. 17-062, January 2017; Revised November 2018.)2046-9136http://nrs.harvard.edu/urn-3:HUL.InstRepos:30000680During 2007–2016, S&P 500 firms distributed to shareholders $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, when taking into account both direct and indirect equity issuances, net shareholder payouts by all public firms during this period were only 41% of net income. And, in fact, during this decade investment increased substantially 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.en-USJournal Article2017-01-1810.1093/rcfs/cfy011