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Disclosure Deregulation of Quarterly Reporting

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  • Vanessa Behrmann
  • Lars Hornuf
  • Jochen Zimmermann

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.

Suggested Citation

  • Vanessa Behrmann & Lars Hornuf & Jochen Zimmermann, 2021. "Disclosure Deregulation of Quarterly Reporting," CESifo Working Paper Series 9344, CESifo.
    • Handle: RePEc:ces:ceswps:_9344
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    More about this item

    Keywords

    quarterly reporting; disclosure deregulation; financial reporting; interim management statement; transparency directive;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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