Trump's push to end quarterly reporting could reshape American business. Professor Rahul Vashishtha explains what research shows about the trade-offs.

When companies report earnings more frequently, they make different investment choices, often abandoning profitable long-term projects that don't pay off quickly. This behavioral shift sits at the heart of President Trump's renewed call to end quarterly reporting requirements in favor of six-month reporting cycles.

In this episode, Professor Rahul Vashishtha discusses his research examining what happened during the historical shift from annual to semi-annual to quarterly reporting between 1950 and 1970.

Vashishtha found that when companies were required to report more often, they significantly reduced their investments in long-term projects. More concerning, this investment decline was accompanied by lower productivity, reduced sales growth, and weaker financial performance. This suggests companies weren't just eliminating waste, but abandoning profitable opportunities.

This "managerial myopia" was most pronounced in industries where investments take years to pay off, precisely where quarterly earnings reports are least effective at capturing true value creation. As Vashishtha explains, "When you start increasing the frequency of your performance measures, what you do really is create a premature evaluation of decisions which are best considered over a much longer horizon."

The episode explores both sides of the reporting frequency debate, examining the trade-offs between transparency and long-term value creation. Vashishtha also offers practical advice for corporate leaders and investors on encouraging long-term thinking, including cultivating patient capital, strategic communications, and thoughtful incentive design.

Record date: September 16, 2025

Duke Fuqua Insights features digestible conversations with our faculty about the most impactful research from their careers, including studies they teach in Fuqua classes. New episodes every other week in season.

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