Publication in Review of Quantitative Finance and Accounting

A new study by Dr. Vanessa Behrmann, Prof. Lars Hornuf,  Daniel Vrankar, and Prof. Jochen Zimmermann, examines the impact of Germany’s 2015 deregulation of quarterly reporting. Published in the Review of Quantitative Finance and Accounting, ranked "B" in the latest VHB Jourqual, the study investigates how reduced reporting content affects information asymmetry and firm value.

The study reveals that deregulation reverses the positive effects of previous regulations, increasing information asymmetry and decreasing firm value. Notably, first-tier stocks—those in high demand—are most affected, underscoring the importance of quarterly reports for larger firms. The study also shows that the effects persist in the long run, reinforcing the crucial role of accurate and comprehensive disclosure for overall market transparency.

While higher disclosure levels benefit stock liquidity and firm value, costs associated with quarterly reporting may deter smaller firms from maintaining such standards. However, the study argues that these costs are outweighed by the benefits of regular reporting, especially for larger firms with greater information demands. The findings are significant for policymakers and companies worldwide, as similar deregulation trends emerge across markets.

You can access the full article online here.