Sooner or Later? A Study of Report Timing

Abstract

In this paper, we study the timing of reporting in the presence of financing constraints, and examine how the timing of reporting affects endogenous input decisions and thus impacts efficiency. We find that when the entrepreneur's input is crucial in determining a project's outcome, it is efficient either to require no report or to make the reporting time late. When the input is not crucial but it is still desirable, the reporting time should be set sufficiently early. When the input is too costly and/or not very effective, the reporting time should be set at the middle point of the period. Our message is that, to inform the debate on whether the best reporting time should be sooner or later, we should take into consideration the role of firms/entrepreneurs' endogenous input in determining projects' outcomes.