Re-Examining the Effect of Quarterly Reporting on Firm Value—New Evidence from the Introduction of a Risk-Based Approach in Singapore

ABSTRACT Kajüter, Klassmann, and Nienhaus (2019) (KKN) find that mandating quarterly reporting is net costly for small firms. In this study, we re-examine the firm value effect of quarterly reporting using Singapore’s regulatory change from a size-based to a risk-based approach to quarterly reporting, in which only high-risk firms are mandated to report quarterly. We find that prior mandatory quarterly reporters do not react significantly to the regulatory relaxation. However, firms with a strong demand for transparency and small firms previously exempted from quarterly reporting react significantly negative (−0.83 and −1.67 percent, respectively). Consistent with KKN, high-risk firms that are now required to report quarterly perceive the mandate as burdensome (−2.80 percent). Moreover, firms exhibit heightened uncertainty after the announcement of the regulatory change until the publication of high-risk firms. Finally, quarterly reports of high-risk firms do not generate information spillovers to nonquarterly reporters, whereas those of voluntary continuers do so. JEL Classifications: M41; M48.