Disclosure Deregulation of Quarterly Reporting

54 Pages Posted: 18 Oct 2021

See all articles by Vanessa Behrmann

Vanessa Behrmann

University of Bremen - Chair of Accounting and Control; University of Bremen - Faculty of Business Studies and Economics

Lars Hornuf

University of Bremen - Faculty of Business Studies and Economics; Max Planck Institute for Innovation and Competition; CESifo (Center for Economic Studies and Ifo Institute)

Jochen Zimmermann

University of Bremen - Faculty of Business Studies and Economics; University of Bremen - Chair of Accounting and Control

Date Written: 2021

Abstract

In this article we investigate the deregulation efforts resulting from the 2015 transposition of the EU’s Transparency Directive into German law and analyze whether a reduction in the minimum content requirements for quarterly reporting increases information asymmetries and decreases firm value. Using a novel dataset of firms listed on the Frankfurt Stock Exchange we manually examine firms’ quarterly reports for their content elements and construct a new quarterly reporting measure with an ordinal quality dimension. The results reveal that during the period from 2012 to 2019 lower quarterly reporting levels due to the deregulation on average increase information asymmetry and reduce firm value. We find that this effect is stronger for first-tier stocks and firms with high media coverage which makes quarterly reporting more important for these firms. The results are robust to potential selection effects regarding firms’ choice of quarterly reporting content levels.

Keywords: quarterly reporting, disclosure deregulation, financial reporting, interim management statement, transparency directive

JEL Classification: G140, G320

Suggested Citation

Behrmann, Vanessa and Hornuf, Lars and Zimmermann, Jochen and Zimmermann, Jochen, Disclosure Deregulation of Quarterly Reporting (2021). CESifo Working Paper No. 9344, Available at SSRN: https://ssrn.com/abstract=3943027 or http://dx.doi.org/10.2139/ssrn.3943027

Vanessa Behrmann (Contact Author)

University of Bremen - Chair of Accounting and Control; University of Bremen - Faculty of Business Studies and Economics ( email )

Max-von-Laue Straße 1
Bremen, DE 28359
Germany

HOME PAGE: http://https://www.uni-bremen.de/controlling/personen/team/vanessa-behrmann-msc

Lars Hornuf

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany
+49 89 20348619 (Phone)

HOME PAGE: http://www.hornuf.com

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Jochen Zimmermann

University of Bremen - Chair of Accounting and Control ( email )

Universitaetsallee GW I
Bremen, D-28334
Germany
+49 421 218-9119 (Phone)

HOME PAGE: http://www.controlling.uni-bremen.de

University of Bremen - Faculty of Business Studies and Economics ( email )

Hochschulring 4
Germany
+49 421 218 9121 (Phone)

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