I've come to know the rules while using two nouns together but have some doubt regarding the possessive case in case of two nouns used together. The two sentences are..

Based on newspaper's reports we can conclude that......
Based on newspaper reports we can conclude that......

Why is the first sentence wrong?

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A newspaper report is a compound noun. Its plural is newspaper reports and plural nouns don't require a determiner so the second sentence is grammatically correct: it is also likely to occur.

In newspaper's reports, newspaper's is a possessive/genitive of a single newspaper: one newspaper has produced many reports. But it's one newspaper: newspaper is a countable noun, so a singular newspaper requires a determiner, for example a, the or this.

The following sentences would therefore be correct:

Based on a newspaper's reports we can conclude that......
Based on the newspaper's reports we can conclude that......
Based on this newspaper's reports we can conclude that......

I can't imagine a situation where you would want to use the first sentence, but it is grammatically correct. The other two sentences are both grammatically correct and likely to occur.

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The compound noun newspaper can work as an adjective or a possessive.

  1. Adjective e.g. I read a newspaper report that....

Here we are distinguishing what type of report i.e. not a police report or a school report etc. but a newspaper report.

  1. Possessive e.g. I read a newspaper's report that....

Here we are using newspaper to refer to an organization. The newspaper report could be from any newspaper company/organization. The report belongs to, or is connected to a specific paper.

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Based on newspaper's reports, we conclude that .....

Based on newspaper reports, we conclude that .......

There's nothing wrong with these sentences.

You can say either newspaper's reports or newspaper reports. However the former is far less common and idiomatic than the latter. In British English, I think, you don't use the possessive case (apostrophe-s) with an unanimated thing, for examples, car door, book cover, newspaper cuttings, whereas, in AmE, you can also use the apostrophe-s like car's door, book's cover, newspaper's cuttings.

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