Share buybacks began increasing soon after 1982, when SEC rule 10b-18 allowed companies to repurchase shares on the open market without regulatory limits.

The authors find that private fixed investment in the U.S. over the past 30 years has been low, and find empirical support for the hypothesis that the under-investment is driven by short-termism and tightened governance. In particular, industries with more institutional investor ownership invest less.

empirical