Financial Reporting Frequency and Corporate Innovation
Posted: 2 Aug 2019
Date Written: July 30, 2019
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
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