43 Pages Posted: 15 Jul 2012 Last revised: 10 Mar 2016
Date Written: March 7, 2016
This study examines the costs and benefits of uniform accounting regulation in the presence of heterogeneous firms who can lobby the regulator. A commitment to uniform regulation reduces economic distortions caused by lobbying by creating a free-rider problem between lobbying firms at the cost of forcing the same treatment on heterogeneous firms. Resolving this trade-off, an institutional commitment to uniformity is socially desirable when firms are sufficiently homogeneous or the costs of lobbying to society are large. We show that regulatory intensity for a given firm can be increasing or decreasing in the degree of uniformity, even though uniformity always reduces lobbying. Our analysis sheds light on the determinants of standard-setting institutions and their effects on corporate governance and lobbying efforts.
Keywords: Disclosure, Regulation, Lobbying
JEL Classification: D72, G38, L51, M40, M41
Suggested Citation: Suggested Citation
Friedman, Henry L. and Heinle, Mirko Stanislav, Lobbying and Uniform Disclosure Regulation (March 7, 2016). Journal of Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2106788 or http://dx.doi.org/10.2139/ssrn.2106788