Park on Securities Law and Short-Termism

James J. Park has posted Do The Securities Laws Promote Short-Termism? on SSRN with the following abstract:

Since 1970, the Securities & Exchange Commission (SEC) has required public companies to file disclosures reporting their quarterly financial performance. This mandatory quarterly reporting system has recently been criticized as incentivizing corporations to deliver short-term results rather than developing sustainable, long-term strategies. This Article examines the origins of quarterly reporting to assess whether the SEC should reduce the frequency of periodic reports. It concludes that much of the pressure on public companies to deliver short-term results came as the market increasingly focused on projections issued by research analysts. This finding suggests that rather than reducing periodic disclosure, increasing company disclosure relating to projections would be a more effective reform. The issue of quarterly reporting highlights the contrast between securities and corporate law. The tendency of securities law to favor transacting investors only has a modest impact on public companies because corporate law gives managers discretion to balance short-term and long-term interests. Strong securities law can be checked by weak corporate law.