The Effects of Cross-Border Cooperation on Enforcement and Earnings Attributes

64 Pages Posted: 5 Oct 2017 Last revised: 10 Mar 2018

See all articles by Roger Silvers

Roger Silvers

University of Utah; European Corporate Governance Institute (ECGI)

Date Written: October 4, 2017


The events of Sept. 11, 2001, prompted sweeping cross-border coordination efforts for securities regulators around the globe. After 9/11, the International Organization of Securities Commissions (IOSCO) forged an arrangement—the Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMOU)—that standardizes the protocol for information sharing among participating securities regulators. I link this arrangement to the ability of the SEC to pursue U.S.-listed foreign firms by showing that the probability of enforcement increases by a factor of two or more in firms whose home countries enlist in the MMOU. A much more limited effect on enforcement is observed for similar but bilateral information-sharing agreements, indicating that a broader network creates powerful incentives that are difficult to replicate bilaterally. Because different countries enter the MMOU at different times, their enlistments create a set of staggered shocks to the SEC’s enforcement capacity for U.S.-listed foreign firms. These shocks are associated with predictable improvements in U.S. GAAP-reconciled earnings properties; this helps resolve questions about why the earnings quality of U.S.-listed foreign firms diverged from U.S. firms during pre-MMOU periods.

Note: The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the author and do not necessarily reflect the views of the Commission or of the author’s colleagues on the staff of the Commission.

Keywords: Information Sharing, Regulatory Coordination, Enforcement, SEC, Cross-List, Bonding

JEL Classification: K22, G38, F22, F23, F59, M48

Suggested Citation

Silvers, Roger, The Effects of Cross-Border Cooperation on Enforcement and Earnings Attributes (October 4, 2017). Available at SSRN: or

Roger Silvers (Contact Author)

University of Utah ( email )

1655 E Campus Dr
SLC, UT 01003
United States


European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics