Financial Reporting Frequency and Corporate Innovation

Posted: 2 Aug 2019

See all articles by Renhui Fu

Renhui Fu

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management

Arthur G. Kraft

City University London - Cass Business School

Xuan Tian

Tsinghua University - PBC School of Finance

Huai Zhang

Nanyang Technological University (NTU)

Luo Zuo

Cornell University - Samuel Curtis Johnson Graduate School of Management

Date Written: July 30, 2019

Abstract

We examine how regulation of financial reporting frequency affects corporate innovation. Using a difference-in-differences approach based on a sample of firms that experience a change in their reporting frequency and matched firms whose reporting frequency remains unchanged, we find that higher reporting frequency reduces a firm’s innovation output. The evidence is consistent with the hypothesis that frequent reporting induces managerial myopia and impedes corporate innovation.

Keywords: regulation, reporting frequency, innovation, managerial myopia

JEL Classification: G14, G18, M41, M45

Suggested Citation

Fu, Renhui and Kraft, Arthur Gerald and Tian, Xuan and Zhang, Huai and Zuo, Luo, Financial Reporting Frequency and Corporate Innovation (July 30, 2019). Available at SSRN: https://ssrn.com/abstract=3429228

Renhui Fu

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management ( email )

1954 Huashan Road
Shanghai Jiao Tong University
Shanghai, Shanghai 200030
China
+862152301575 (Phone)

Arthur Gerald Kraft

City University London - Cass Business School ( email )

London, EC2Y 8HB
Great Britain

Xuan Tian

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
China
+86-10-62794103 (Phone)

HOME PAGE: http://xuantian.info/

Huai Zhang

Nanyang Technological University (NTU) ( email )

Nanyang Business School
50 Nanyang Ave.
Singapore, 639798
Singapore
+65-6790-4097 (Phone)

Luo Zuo (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

349 Sage Hall
Ithaca, NY 14853
United States
607-255-4002 (Phone)

HOME PAGE: http://www.johnson.cornell.edu/faculty-research/faculty/lz352/

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