Abstract

http://ssrn.com/abstract=1927696
 
 

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Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity


Renhui Fu


Purdue University; Erasmus University - Rotterdam School of Management

Arthur G. Kraft


City University London - Cass Business School

Huai Zhang


Nanyang Technological University (NTU)

July 10, 2012

Journal of Accounting & Economics (JAE) 54 (2012): 132–149

Abstract:     
Using hand-collected data on firms’ interim reporting frequency from 1951 to 1973, we examine the impact of financial reporting frequency on information asymmetry and the cost of equity. Our results show that higher reporting frequency reduces information asymmetry and the cost of equity, and they are robust towards considerations of the endogenous nature of firms’ reporting frequency choice. We obtain similar results when we focus on mandatory changes in reporting frequency. Our results suggest the benefits of increased reporting frequency.

Number of Pages in PDF File: 51

Keywords: interim reporting frequency, information asymmetry, cost of equity

JEL Classification: G14, G18, M41, M45

Accepted Paper Series


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Date posted: September 16, 2011 ; Last revised: January 7, 2013

Suggested Citation

Fu, Renhui and Kraft, Arthur G. and Zhang, Huai, Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity (July 10, 2012). Journal of Accounting & Economics (JAE) 54 (2012): 132–149. Available at SSRN: http://ssrn.com/abstract=1927696 or http://dx.doi.org/10.2139/ssrn.1927696

Contact Information

Renhui Fu
Purdue University ( email )
Krannert School of Management
West Lafayette, IN 47907-1310
United States
7654967489 (Phone)
Erasmus University - Rotterdam School of Management ( email )
Burgemeester Oudlaan 50
Room T08-39
Rotterdam, 3062PA
Netherlands
31-10-4082762 (Phone)
Arthur Gerald Kraft (Contact Author)
City University London - Cass Business School ( email )
London, EC2Y 8HB
Great Britain
Huai Zhang
Nanyang Technological University (NTU) ( email )
Nanyang Business School
50 Nanyang Ave.
Singapore, 639798
Singapore
+65-6790-4097 (Phone)
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