City Research Online

Frequent Financial Reporting and Managerial Myopia

Kraft, A., Vashishtha, R. and Venkatachalam, M. (2018). Frequent Financial Reporting and Managerial Myopia. Accounting Review, 93(2), pp. 279-275. doi: 10.2308/accr-51838


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: Cass Business School > Finance
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