Online seminar – Mandatory reporting frequency, informed trading, and corporate myopia

Ms Hwa Young Kim, Anderson School of Management, University of California, Los Angeles (UCLA)

This paper examines the relationship between mandatory reporting frequency and corporate myopia in the presence of informed trading. While previous studies attribute myopia to frequent reporting, the empirical evidence of this claim is inconsistent. The results herein show that corporate myopia can be sustained under both frequent and infrequent reporting regimes. I also demonstrate that the level of myopia can even increase as mandatory reporting frequency decreases when reporting noise is sufficiently high since less frequent reporting induces more informed trading. The results offer potential explanations for the mixed empirical findings regarding the relationship between mandatory reporting frequency and corporate myopia. They are robust to extensions, including dynamic trading or different information structures. Overall, this study highlights that increasing mandatory reporting frequency does not always exacerbate corporate short-termism when additional information sources are taken into account.

Speaker bio

Hwa Young Kim is a doctoral candidate in Accounting at UCLA Anderson School of Management and plans to complete a PhD in June 2022. Her research relates broadly to how accounting information shapes corporate behavior externally (in financial markets) and internally (within organisations). She uses analytical models and archival data to examine research questions in the areas of (1) the real effects of financial reporting and (2) the effect of incentive design on corporate decisions. During her doctoral studies, she gained teaching experience by working for financial accounting and managerial accounting courses across different levels of MBA students. Leveraging her research interest, which focuses on the role of accounting information in financial markets and organisations, she wishes to guide students on how to interpret and utilise accounting information in different contexts.

Read the paper

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Meeting ID: 841 3434 7528
Password: 982715

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