Abstract: This paper analyzes whether corporate managers change their financial decisions to accommodate short-sighted investors in the market and further analyzes whether this affects the market performance of the firm from the perspective of corporate strategy. Corporate strategy is based on the theoretical framework proposed by Miles and Snow (2003), which classifies companies into aggressors, analysts and defenders. The main findings of this paper are as follows: firstly, companies will increase their surplus management and reduce R&D expenditure to cater for short-sighted market investors. Secondly, when included in the corporate strategy perspective, analysts are more likely to increase surplus management and reduce R&D expenditure due to market short-sightedness than other strategic types of companies. Thirdly, investors who are not short-sighted do not like corporate surplus management, especially for the more aggressive. On the other hand, the preference of analysts to cater to short-sighted investors will be met with a significant positive response from the market, but in the long term market performance will start to reverse and analysts will no longer be able to profit from catering to short-sighted investors through surplus management.



Key words: corporate strategy, market short-sightedness, surplus management, market performance