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 input to other CRC projects and 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 corporate 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 United States are subject to strict disclosure regulation, private firms in the United States are largely unregulated in this regard and consequently 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. This project addresses this void.

  • Research Program

    We seek to understand how accounting regulation is set across countries and over time. The focus of the project is on regulation that mandates the disclosure of financial information by firms as agent-senders. These disclosures enhance the transparency of firms by making information available, accessible and visible to a host of external stakeholders (e.g., capital providers, government, or society) as agent-receivers. Our goal is to build on and extend the data that we collected thus far and analyze the extended data for systematic patterns. We also plan to use these data for a systematic analysis of the extant literature on corporate transparency. Lastly, we aim to understand cross-country differences in bright-line size thresholds that determine regulatory accounting requirements.

  • Research Contribution

    During the the first funding period, we have collected a comprehensive dataset on regulation that mandates the disclosure of financial information and discovered various empirical facts.

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, Goethe University Frankfurt, University of Cologne and Leibniz University Hannover who share the same research agenda.

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