Alex Edmans, a Professor of Finance at London Business School, has been awarded a research grant of €900,000 from the European Research Council (ERC). The grant has been awarded to fund a three-year research programme on long-term investment.
Professor Edmans’ research will look at the incentives for companies to engage in long-term investment, particularly in intangible assets that take several years before any output is visible to the market. He will analyse the role of financial markets and CEO compensation in promoting or dissuading investment.
In response to the grant, Professor Edmans said: “Investment in intangible assets, such as brand strength, innovative capability, corporate culture, and corporate social responsibility, is critical to the long-run success of the modern firm. However, managers often have incentives to pursue short-term profit at the expense of long-term value. I am both delighted and grateful to have received this grant, which will allow me to study mechanisms that can support managers’ pursuit of the long-term.”
The award was made under the ERC’s Starting Grant. The ERC’s main aim is to stimulate scientific excellence by supporting and encouraging the very best and truly creative scientists, scholars and engineers to be adventurous and take risks in their research.