Description:
While quarterly reporting can mitigate information asymmetry between managers and investors, it may also generate myopic managerial 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. We also find that the effect is more pronounced for firms with higher foreign ownership. Our findings suggest that mandatory quarterly reporting encourages managerial myopic behavior, especially when market pressure is stronger. Our findings imply that it may lead to unintended consequences such as inducing managers' myopic behavior