Determinants of Mandatory Disclosure

Brüggemann explores how mandatory financial disclosure varies across countries and over time. Financial disclosures are subject to diverse regulatory regimes. Understanding the determinants of these regimes is instrumental to understanding what drives financial transparency in corporations. The project will provide fruitful input to other TRR 266 projects, and to the academic community at large via the Open Science Data Center, by constructing a comprehensive panel dataset that captures the variation in regulatory disclosure regimes. By exploring this dataset for systematic patterns, the project will also provide insights on the endogenous nature of disclosure regulation and, thus, on the transparency of corporations.

  • Research Question

    How does transparency-inducing financial disclosure regulation vary across countries and over time, and what determines this variation?

  • Research Motivation

    Prior literature as well as anecdotal evidence suggest that accounting regulators offer firms menus of disclosure regimes and that these menus differ considerably across countries. For example, while listed firms in the US are subject to strict disclosure regulation, private
    firms in the US are largely unregulated in this regard and, thus, do not have to make their financial statements publicly available. In contrast, regulatory menus tend to be less diverse in many European countries where most firms with limited liability have to publish their financial statements on electronic filing platforms regardless of their listing status. Prior literature has little to say about why we observe these cross-country differences in regulatory menus.

  • Research Program

    We aim to understand how accounting regulation is set. More specifically, we explore how mandatory financial disclosure varies across countries and over time. Understanding the determinants of diverse regulatory regimes is instrumental in understanding what drives financial transparency in corporations. We will therefore collect and describe a comprehensive dataset on disclosure regulation around the world. This dataset will capture the full regulatory menu of current and past disclosure regimes available within the sample countries. Furthermore, we will analyze whether these country-specific regulatory menus vary systematically across countries and over time. Finally, we will examine how local regulators respond to supranational harmonization to keep country-specific regulatory menus intact.

  • Research Contribution

    Building a comprehensive understanding of disclosure regimes will help regulators refine the regulatory menus, and help firms understand the menus on offer.

Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, WHU – Otto Beisheim School of Management, ESMT Berlin and Goethe University Frankfurt who share the same research agenda.

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