- Suresh Nallareddy, Robert Pozen & Shivaram Rajgopal, Consequences of Mandatory Quarterly Reporting: The U.K. Experience (2017)
… We exploit the start of mandatory quarterly reporting by the Financial Conduct Authority (FCA) in 2007 and the end of the requirement in 2014 in the United Kingdom to examine corporate and capital market behavior. After imposition of mandatory quarterly reporting in 2007, we find (i) a dramatic decline in the number of companies that issue reports with quantitative information (defined as including both sales and earnings numbers for the quarter); (ii) a substantial increase in companies announcing managerial guidance for the upcoming year’s earnings or sales; and (iii) an increase in analyst following for all sample companies. However, using a difference-in-differences analysis, we find that the imposition of mandatory quarterly reporting has virtually no impact on firms’ investment decisions. Companies that voluntarily moved back from quarterly to semi-annual reporting after 2014 have experienced a reduction in analyst coverage, but no detectable increases in their levels of corporate investments.