More than 80 scientists, including professors, postdoctoral and doctoral students, address the question how accounting and taxation affect firm and regulatory transparency and how regulation and transparency impact our economy and society. The TRR 266 projects are organized as follows:
How do accounting and taxation affect transparency?
Projects that are primarily related to the measurement of transparency and its determinants are grouped in project area A: “Establishing Transparency”. Project area A comprises three types of studies:
- studies that explore the level and nature of provided information and its effect on
transparency, as well as the regulatory and institutional environment that shapes these phenomena;
- studies that develop theories about the cause and effect mechanisms that shape
information and transparency; and
- empirical studies that test these theoretical predictions.
The findings of Project A will be instrumental in identifying potential boundaries of regulation: Is the public able to process complex accounting information? Do information intermediaries, such as financial analysts or the financial media, produce trustworthy information? How far do the roles of “traditional” intermediaries such as analysts differ
from those of “new” intermediaries like crowd platforms? How do firms’ incentives affect
reporting decisions and is this anticipated by the recipients of the information?
What are the effects of transparency?
While project area A examines how transparency is being established, project area B focuses on the internal and external effects of transparency. Effects of transparency can result from multiple mechanisms that are crucial to identify and understand. While external effects of firm transparency in capital markets have been studied extensively, within-firm consequences of transparency or effects on product and labor markets have been somewhat neglected by prior literature. For example, we know very little about whether transparency affects the market position of a firm in the labor market or how firm- and industry-level transparency is linked to product market competition. Moreover, even research on capital market effects of transparency is mostly limited to public firms and relies on readily available archival data.
Project area B is designed to address these shortcomings. It does so by:
- using insights from project area A by incorporating the identified determinants of information flows and transparency as observable covariates.
- identifying context-dependent mechanisms that give rise to intended and unintended effects of transparency.
- testing the theoretical predictions along these predicted mechanisms by exploiting settings that allow for causal inference.
Transparency by field data, open science, and dialog
We are committed to transparency as both our research subject and our work philosophy. As a consequence, we will make the data we obtain available to the public and develop methods to present our research in the most transparent and reproducible way possible. The purpose of project area C is to provide support functions to all other projects and to open access to the resources of our research program to the academic and public community.