Does industry concentration effect firm decision to stop reporting quarterly financial reports?

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The main aim of this dissertation is to study the effect of industry concentration on quarterly reporting in the United Kingdom. The requirement for UK listed companies to produce quarterly reports was relaxed in 2014 and since then the UK companies were free to choose whether to produce quarterly reports or not, however many firms still continue to provide them. It can be argued that industry concentrationon might affect reporting frequency because in industries where industry concentration is high (large number of companies exists), there exists intense competition between the competing companies, and so the companies tend not to publish interim reports so their crucial information and financial performance can be prevented from getting disclosure in the market. Moreover, the past empirical literature and researches provide very limited evidence regarding the effect of industry concentration on voluntary quarterly reporting, especially in the United Kingdom. So, this present study is very important as it attempts to fill the gap found in the existing research by answering if industry concentration effect firm decision to stop reporting quarterly financial reports or reduces the frequency of financial reporting. In view of this, this study evaluates the relationship between industry concentration (in terms of number of companies or competitors present in an industry) and frequency of financial reports (quarterly reporting). The sample of the study is represented through 251 firms listed in FTSE350 in United Kingdom in 2017. Data on reporting frequency and industry concentration are collected from DataStream Thomson Reuters, the UK Government’s Department for Business, Innovation & Skills Thomson One Banker. The results of Binary Logit Regression Analysis indicate no significant effect of industry concentration on frequency of financial reports. Therefore, it was evident that industry concentration does not have a significant effect on quarterly reporting in the United Kingdom. However, some evidence of a negative relationship between industry concentration and reporting frequency was found, but only for the very largest firms (FTSE100 firms).

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