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Interim Reporting Frequency and Financial Analysts' Expenditures

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  • Kenton K. Yee

Abstract

This paper relates interim financial reporting frequency in a multiperiod Kyle framework to securities prices, trading volume, market liquidity, and analysts' information acquisition expenditures. The model supports conventional wisdom that more frequent interim reporting improves the information content of securities prices, reduces reporting day price volatility and trading volume, and enhances market liquidity. However, the model suggests that more frequent financial reporting induces analysts to increase their redundant information acquisition expenditures, which may be socially wasteful.

Suggested Citation

  • Kenton K. Yee, 2004. "Interim Reporting Frequency and Financial Analysts' Expenditures," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(1‐2), pages 167-198, January.
    • Handle: RePEc:bla:jbfnac:v:31:y:2004:i:1-2:p:167-198
    DOI: 10.1111/j.0306-686X.2004.00005.x
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    References listed on IDEAS

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    1. Kim, O & Verrecchia, Re, 1991. "Trading Volume And Price Reactions To Public Announcements," Journal of Accounting Research, Wiley Blackwell, vol. 29(2), pages 302-321.
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    4. Demski, Joel S. & Feltham, Gerald A., 1994. "Market response to financial reports," Journal of Accounting and Economics, Elsevier, vol. 17(1-2), pages 3-40, January.
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    6. Karpoff, Jonathan M., 1987. "The Relation between Price Changes and Trading Volume: A Survey," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 22(1), pages 109-126, March.
    7. Shores, D, 1990. "The Association Between Interim Information And Security Returns Surrounding Earnings Announcements," Journal of Accounting Research, Wiley Blackwell, vol. 28(1), pages 164-181.
    8. Bushman, Rm & Indjejikian, Rj, 1995. "Voluntary Disclosures And The Trading Behavior Of Corporate Insiders," Journal of Accounting Research, Wiley Blackwell, vol. 33(2), pages 293-316.
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    Cited by:

    1. Keiichi Kubota & Hitoshi Takehara, 2016. "Information Asymmetry and Quarterly Disclosure Decisions by Firms: Evidence From the Tokyo Stock Exchange," International Review of Finance, International Review of Finance Ltd., vol. 16(1), pages 127-159, March.
    2. Mark Tippett, 2004. "Discussion of Interim Reporting Frequency and Financial Analysts’ Expenditures," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(1‐2), pages 199-207, January.
    3. Yin Toa Lee & Wilson H. S. Tong, 2018. "The impact of reporting frequency on the information quality of share price: evidence from Chinese state-owned enterprises," Frontiers of Business Research in China, Springer, vol. 12(1), pages 1-18, December.

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