The Tone From Above: The Effect of Communicating a Supportive Regulatory Strategy on Reporting Quality
Posted: 2 Aug 2018
Date Written: May 1, 2018
In collaboration with the Authority for the Financial Markets in the Netherlands, we manipulate the content of official letters that instruct financial intermediaries to submit a mandatory self‐assessment. As part of the Registered Report Process, we submitted our hypotheses, experimental procedure, and planned statistical analyses before data collection. We predicted that a request indicating a supportive regulatory attitude has a positive effect on reporting quality on average. We also predicted this effect to be stronger for small firms and for firms with a long‐term orientation, and to become negative for firms with a short‐term orientation. Planned analyses show that a supportive letter reduced reporting quality unless firms had a long‐term orientation, supporting the moderating influence of time horizon, but providing no support for the expected average effect or for moderation by firm size.
Keywords: reporting quality; responsive regulation; support; time horizon
JEL Classification: G28; K42; M48
Suggested Citation: Suggested Citation