Lobbying and Uniform Disclosure Regulation

43 Pages Posted: 15 Jul 2012 Last revised: 10 Mar 2016

Henry L. Friedman

University of California, Los Angeles (UCLA) - Accounting Area

Mirko Stanislav Heinle

University of Pennsylvania - Accounting Department

Date Written: March 7, 2016

Abstract

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

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

Henry L. Friedman

University of California, Los Angeles (UCLA) - Accounting Area ( email )

D416 Anderson Complex
Los Angeles, CA 90095-1481
United States

Mirko Stanislav Heinle (Contact Author)

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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