Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research

91 Pages Posted: 13 Mar 2008 Last revised: 7 May 2008

See all articles by Christian Leuz

Christian Leuz

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Leibniz Institute SAFE; European Corporate Governance Institute (ECGI); Center for Financial Studies (CFS); CESifo Research Network

Peter D. Wysocki

Boston University Questrom School of Business

Date Written: March 2008

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.

Keywords: Accounting, Asymmetric information, Capital markets, Institutional economics, International, Mandatory disclosure, Political economy, Regulation, Standards

JEL Classification: D78, D82, G14, G18, G30, G38, K22, K42, M41, M45

Suggested Citation

Leuz, Christian and Wysocki, Peter D., Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research (March 2008). Available at SSRN: https://ssrn.com/abstract=1105398 or http://dx.doi.org/10.2139/ssrn.1105398

Christian Leuz (Contact Author)

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European Corporate Governance Institute (ECGI)

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Peter D. Wysocki

Boston University Questrom School of Business ( email )

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