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Does mandatory quarterly reporting induce managerial myopic behavior? Evidence from Japan

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  • Koga, Yuya
  • Yamaguchi, Tomoyasu

Abstract

While quarterly reporting can provide timely information to investors and mitigate information asymmetry between managers and investors, it may also generate managerial myopic behavior. This study examines whether mandatory quarterly reporting induces managerial myopic behavior in Japanese firms. Using a difference-in-differences approach, we find that mandatory quarterly reporting is associated with an increase in managerial myopic behavior, proxied by real earnings management. We also find that this association is stronger for firms with higher foreign ownership. Our findings suggest that mandatory quarterly reporting encourages managerial myopic behavior, especially when market pressure is stronger.

Suggested Citation

  • Koga, Yuya & Yamaguchi, Tomoyasu, 2023. "Does mandatory quarterly reporting induce managerial myopic behavior? Evidence from Japan," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005147
    DOI: 10.1016/j.frl.2023.104142
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    Cited by:

    1. Wenjun Kuang, 2023. "Accounting comparability and the accuracy of management earnings forecasts in Japan," Discussion Papers in Economics and Business 23-07, Osaka University, Graduate School of Economics.

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    More about this item

    Keywords

    Quarterly reporting; Financial reporting frequency; Managerial myopic behavior; Real earnings management; Foreign ownership; Japan;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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