Does mandatory quarterly reporting induce managerial myopic behavior? Evidence from Japan

Yuya Koga and Tomoyasu Yamaguchi

Finance Research Letters, 2023, vol. 56, issue C

Abstract: While quarterly reporting can provide timely information to investors and mitigate information asymmetry between managers and investors, it may also generate managerial myopic behavior. This study examines whether mandatory quarterly reporting induces managerial myopic behavior in Japanese firms. Using a difference-in-differences approach, we find that mandatory quarterly reporting is associated with an increase in managerial myopic behavior, proxied by real earnings management. We also find that this association is stronger for firms with higher foreign ownership. Our findings suggest that mandatory quarterly reporting encourages managerial myopic behavior, especially when market pressure is stronger.

Keywords: Quarterly reporting; Financial reporting frequency; Managerial myopic behavior; Real earnings management; Foreign ownership; Japan (search for similar items in EconPapers)
JEL-codes: G32 G38 M41 M48 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005147

DOI: 10.1016/j.frl.2023.104142

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