Uneven Regulation and Economic Reallocation: Evidence from Transparency Regulation

When: 30 May 2022, 14:15-15:30
Where: HoF 1.28
Speaker: Matthias Breuer

Hybrid event.

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Zoom URL: https://uni-frankfurt.zoom.us/j/69545084263?pwd=OUxxSm9FTDlkNEliZ1c4NHY4MXA2dz09
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Abstract:

We investigate the impact of uneven transparency regulation across countries and industries on the
location of economic activity. Using two distinct sources of regulatory variation—the varying extent
of financial-reporting requirements and the staggered introduction of electronic business registers in
Europe—, we consistently document that direct exposure to transparency regulation is negatively
associated with the focal industry’s economic activity in terms of inputs (e.g., employment) and
outputs (e.g., production). By contrast, we find that indirect exposure to supplier and customer
industries’ transparency regulation is positively associated with the focal industry’s economic activity.
Our evidence suggests uneven transparency regulation can reallocate economic activity from regulated
toward unregulated countries and industries, distorting the location of economic activity.

Paper

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