Fable Data informs University of Oxford accounting paper: Voluntary Disclosure Under Idiosyncratic Uncertainty

Using Fable’s European transaction data, our partner from the Saïd Business School at the University of Oxford has produced a study which explores how volatile company performance affects firms’ propensities to make voluntary disclosures such as capital expenditure forecasts. In her job market paper, Qirong Song, a PhD candidate in Accounting, used Fable’s tagged data to capture a daily assessment of company performance, enabled by the real-time and high-frequency nature of the dataset.

“The first advantage of real-time consumer transaction data is that this data is free from accrual management and any other reporting manipulation. Another major advantage compared to quarterly or annual reported revenue data, is that the granularity of consumer transaction data enables intra-quarter and intra-year measurements of firm performance uncertainty.”

The study shows that this operational volatility has a significant impact on managers’ disclosure decision making. Her paper finds that firms tend to announce fewer voluntary capital expenditure forecasts when firm performance is more volatile, and that this negative effect is stronger when firms are doing well. Interestingly, this suggests that, during periods of uncertainty, managers are more informed when firm performance is declining.

You can find this insightful paper below, as well as Qirong’s webpage here: