Regulatory Fragmentation

Forthcoming, Journal of Finance

65 Pages Posted: 1 Apr 2021 Last revised: 17 Jan 2024

See all articles by Joseph Kalmenovitz

Joseph Kalmenovitz

University of Rochester - Simon Business School

Michelle Lowry

Drexel University; European Corporate Governance Institute (ECGI)

Ekaterina Volkova

University of Melbourne - Faculty of Business and Economics

Date Written: January 15, 2024


Regulatory fragmentation occurs when multiple federal agencies oversee a single issue. Using the full text of the Federal Register, the government’s official daily publication, we provide the first systematic evidence on the extent and costs of regulatory fragmentation. Fragmentation increases the firm’s costs while lowering its productivity, profitability, and growth. Moreover, it deters entry into an industry and increases the propensity of small firms to exit. These effects arise from redundancy and, more prominently, from inconsistencies between government agencies. Our results uncover a new source of regulatory burden, and we show that agency costs among regulators contribute to this burden.

Keywords: E22, G18, G28, G31

JEL Classification: regulation, government activity, regulatory fragmentation, productivity

Suggested Citation

Kalmenovitz, Joseph and Lowry, Michelle B. and Volkova, Ekaterina, Regulatory Fragmentation (January 15, 2024). Forthcoming, Journal of Finance, Available at SSRN: or

Joseph Kalmenovitz (Contact Author)

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States


Michelle B. Lowry

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

European Corporate Governance Institute (ECGI) ( email )

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

Ekaterina Volkova

University of Melbourne - Faculty of Business and Economics ( email )

Victoria, 3010

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