The Effect of Regulatory Harmonization on Cross-Border Labor Migration: Evidence from the Accounting Profession

82 Pages Posted: 19 Jan 2015 Last revised: 22 Dec 2016

See all articles by Matthew J. Bloomfield

Matthew J. Bloomfield

The Wharton School of the University of Pennsylvania

Ulf Brüggemann

Humboldt University of Berlin - School of Business and Economics

Hans Bonde Christensen

University of Chicago - Booth School of Business

Christian Leuz

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Center for Financial Studies (CFS); University of Pennsylvania - Wharton Financial Institutions Center; CESifo Research Network

Multiple version iconThere are 4 versions of this paper

Date Written: September 1, 2016

Abstract

The paper examines whether international regulatory harmonization increases cross-border labor migration. To study this question, we analyze European Union (EU) initiatives that harmonized accounting and auditing standards. Regulatory harmonization should reduce economic mobility barriers, essentially making it easier for accounting professionals to move across countries. Our research design compares the cross-border migration of accounting professionals relative to tightly-matched other professionals before and after regulatory harmonization. We find that international labor migration in the accounting profession increases significantly relative to other professions. We provide evidence that this effect is due to harmonization, rather than increases in the demand for accounting services during the implementation of the rule changes. The findings illustrate that diversity in rules constitutes an economic barrier to cross-border labor mobility and, more specifically, that accounting harmonization can have a meaningful effect on cross-border migration.

Keywords: Accounting harmonization, Regulation, IFRS, European Union, Labor migration and mobility

JEL Classification: D10, E24, F22, F55, F66, J44, J61, J62, K22, L51, L84, M41, M42

Suggested Citation

Bloomfield, Matthew J. and Brüggemann, Ulf and Christensen, Hans Bonde and Leuz, Christian, The Effect of Regulatory Harmonization on Cross-Border Labor Migration: Evidence from the Accounting Profession (September 1, 2016). European Corporate Governance Institute (ECGI) - Law Working Paper No. 303/2016; Chicago Booth Research Paper No. 15-03. Available at SSRN: https://ssrn.com/abstract=2551569 or http://dx.doi.org/10.2139/ssrn.2551569

Matthew J. Bloomfield

The Wharton School of the University of Pennsylvania ( email )

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Ulf Brüggemann

Humboldt University of Berlin - School of Business and Economics ( email )

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Hans Bonde Christensen (Contact Author)

University of Chicago - Booth School of Business ( email )

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Christian Leuz

University of Chicago - Booth School of Business ( email )

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HOME PAGE: http://faculty.chicagobooth.edu/christian.leuz/

National Bureau of Economic Research (NBER) ( email )

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HOME PAGE: http://www.nber.org

European Corporate Governance Institute (ECGI)

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HOME PAGE: http://www.ecgi.org

Center for Financial Studies (CFS) ( email )

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University of Pennsylvania - Wharton Financial Institutions Center

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United States

CESifo Research Network

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Germany

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