City Research Online

Frequent Financial Reporting and Managerial Myopia

Kraft, A., Vashishtha, R. & Venkatachalam, M. (2018). Frequent Financial Reporting and Managerial Myopia. Accounting Review, 93(2), pp. 249-275. doi: 10.2308/accr-51838

Abstract

Using the transition of US firms from annual reporting to semi-annual reporting and then to quarterly reporting over the period 1950-1970, we provide evidence on the effects of increased reporting frequency on firms’ investment decisions. Estimates from difference-in-differences specifications indicate that increased reporting frequency is associated with an economically large decline in investments. Additional analyses reveal that the decline in investments is most consistent with frequent financial reporting inducing myopic management behavior. Our evidence informs the recent controversial debate about eliminating quarterly reporting for US corporations.

Publication Type: Article
Publisher Keywords: Financial reporting frequency; real effects; myopia; investment; short termism
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
SWORD Depositor:
[thumbnail of 2017.05.04_KVV_Abstract.and.Appendices.pdf]
Preview
Text - Accepted Version
Download (83kB) | Preview

Export

Add to AnyAdd to TwitterAdd to FacebookAdd to LinkedinAdd to PinterestAdd to Email

Downloads

Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login