This paper examines the impact of mandatory reporting and auditing of firms' financial statements on industry-wide resource allocation. Using threshold-induced variation in the share of mandated firms in a given industry, I document that reporting mandates facilitate ownership dispersion in capital markets and spur competition in product markets. I, however, do not find that reporting mandates unambiguously improve the efficiency of industry-wide resource allocation. With respect to auditing mandates, I find only that they impose a fixed cost on firms, deterring smaller entrants.
Breuer, Matthias. "How Does Financial-Reporting Regulation Affect Industry-Wide Resource Allocation?" Journal of Accounting Research 59, no. 1 (March 2021): 59-110.
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