Saturday, March 15, 2008
Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research, by CHRISTIAN LEUZ, University of Chicago - Graduate School of Business; European Corporate Governance Institute (ECGI); University of Pennsylvania - Wharton Financial Institutions Center, and PETER D. WYSOCKI, Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA), was recently posted on SSRN. Here is the abstract:
This paper surveys the theoretical and empirical literature on the economic consequences of financial reporting and disclosure regulation. We integrate theoretical and empirical studies from accounting, economics, finance and law in order to contribute to the cross-fertilization of these fields. We provide an organizing framework that identifies firm-specific (micro-level) and market-wide (macro-level) costs and benefits of firms' reporting and disclosure activities and then use this framework to discuss potential costs and benefits of regulating these activities and to organize the key insights from the literature. Our survey highlights important unanswered questions and concludes with numerous suggestions for future research.