The effect of mandatory quarterly reporting on firm value

Kajüter P, Klassmann F, Nienhaus M


Abstract
We exploit a regulatory change in Singapore to analyze the capital market effects of mandatory quarterly reporting. The listing rule implemented in 2003 has required firms with a market capitalization above S$75 million-but not firms with a market capitalization below this threshold - to publish quarterly financial statements. Using regression discontinuity analysis for our identification, we provide novel evidence of the causal effects of mandatory quarterly reporting on small firms. We find a 5 percent decrease in firm value consistent with the notion that mandatory quarterly reporting is perceived as a net burden for small firms. Contrary to popular belief, we cannot find evidence of informational benefits or myopic investmentfor firms around the threshold. Additional tests suggest positive information spillover effects from large mandatory quarterly reporters to non-quarterly reporting firms.



Publication type
Research article (journal)

Peer reviewed
Yes

Publication status
Published

Year
2019

Journal
The Accounting Review

Volume
94

Start page
251

End page
277

Language
English