This paper studies the effect of reporting regulation on private firms' bank credit and its economic consequences. I exploit the Spanish institutional setting, which provides a unique combination of confidential loan data and regulatory features that generate quasi‐exogenous variation in reporting regulation. Using a regression discontinuity design, I find that firms subject to incremental reporting regulation obtain more bank credit primarily through cash flow–based lending, term loans, and long‐term debt, without higher interest rates. These findings are explained by stronger banking competition and greater reliance on financial statement data. However, firms do not expand their net financial position, as bank credit substitutes for other liabilities, and exhibit weaker performance consistent with the costs of reporting regulation. This evidence from a different setting offers new insights into how reporting regulation influences credit contracting for private firms and strengthens the empirical basis for policy‐making

We examine the labor market consequences of the 2020 Regulation S‐K requiring human capital disclosure in 10K filings. Using large‐sample job‐level data and a Generative Large Language Model (GLLM), we observe that public firms subject to the regulation increase their disclosure of diversity, equity, and inclusion (DEI) information in job postings relative to a matched sample of large private firms. The increase in job‐posting disclosure is more pronounced among firms facing greater external pressure to increase their workforce diversity. These findings suggest a shift in demand for diverse candidates by public firms following the regulation. Yet, consistent with short‐term inelastic labor supply, this demand shift lengthens the recruitment period, with noticeable increases in workplace gender diversity emerging one year after the regulation, particularly among firms that demonstrate a credible commitment to DEI. Our study documents how securities regulations can impact labor market practices and underscores the challenges involved in shaping workforce diversity

We study the economic consequences of anti‐loss trafficking rules, which disallow the use of loss carryforwards as a tax shield after a substantial ownership change. We use staggered changes to these rules in the EU27 Member States, Norway, and the United Kingdom from 1998 to 2019 and find that limiting the transfer of tax losses is related to the number of mergers and acquisitions (M&A) declining by 18%, driven by loss‐making targets. Turning to broader industry dynamics, we find decreases in survival rates of young companies after tighter regulations. Loosening of regulation is associated with increased firm survival. Tightening (loosening) anti‐loss trafficking rules is related to decreased (increased) industry productivity, especially in R&D‐intensive industries that are more prone to loss‐making. Finally, tighter anti‐loss trafficking rules are associated with lower deal synergies and risk‐taking. All effects concentrate in strict regimes

Recent SEC regulations require that qualified hedge fund advisers provide their investors with narrative disclosures of their business and operations. We find that 40% of these disclosures omit or de‐emphasize information regarding advisers' operational and investment risks when compared to other sources of public information. Funds with such “inconsistencies” are associated with predictably lower fund performance but do not differ in their fund flows, flow‐performance relation, ownership structure, or management fees. These results are consistent with investors being subject to limited strategic thinking, which prevents them from fully unraveling the implications of strategic omissions. This, in turn, contributes to advisers' successful use of discretion to de‐emphasize information with adverse performance implications. Our findings suggest that information processing frictions can facilitate nondisclosure, even in markets with sophisticated investors

Labor unions in the United States are subject to financial reporting mandates. This study examines how these mandates affect unions and their members. Using several regulation‐based empirical designs, we document that more granular reporting requirements adversely affect unions' election outcomes. Supplemental analyses suggest that these findings are consistent with the strategic use of unions' disclosed information by parties such as employers and their consultants. We find mixed evidence on whether the mandates materially improve oversight of unions. Lastly, we find that the mandate reduces employees' average pay without clear benefits for employers, aside from reallocating investment from labor to capital. Collectively, our results suggest that more fine‐grained financial reporting requirements impose costs on unions and weaken their ability to represent employees, resulting in worse employment outcomes

Regulators are contemplating or mandating precise measurement of financial climate‐risk exposure to promote sustainable investments. We show that such mandates can be counterproductive in the presence of social funds that catalyze change by subsidizing the adoption of cleaner production technologies. Firms can exploit a social fund's impact motive by measuring their climate‐risk exposure imprecisely. This strategic imprecision prevents the fund from distinguishing between firms that require subsidies and those that would switch to clean technologies for financial reasons alone, thereby increasing the ex ante subsidies firms can extract. A by‐product of this rent‐seeking behavior is that firms adopt clean technologies more frequently than would be jointly efficient under precise measurement. Our analysis suggests that the regulatory push for precise climate‐risk measurement can reduce social funds' impact and the frequency of green transitions

In this study, I explore how accounting rules—in particular the restrictiveness of GAAP—have impacted the labor market for accountants. I find that when the rules become more restrictive, there are fewer students majoring in accounting and fewer accountants and auditors overall. The overall number of accounting positions that firms recruit for does not decrease when the rules become more restrictive; however, the nature of accountants' work changes. There is less focus on tasks such as applying judgment, thinking creatively, and thinking critically and more focus on determining compliance. Despite the decrease in accountants, earnings for accountants do not increase, and the wage distribution becomes more compressed. I supplement these analyses with a survey‐based field experiment and find that the salience of restrictiveness heightens students' views of accounting as a profession where they are unable to use creative and critical thinking. Overall, the findings suggest that restrictive regulation can shift the task content of occupations and reduce the pool of individuals interested in the profession

This paper hypothesizes that information flows from target firms to large shareholders during activist campaigns and that these flows have governance consequences. Focusing on actively managed mutual fund families, we find that informed trading by large‐holding fund families increases during activist campaigns relative to smaller‐holding fund families invested in the same firms. The effect is stronger for firms that attend more invitation‐only investor events, face greater threats from activist campaigns, and are harder to value. Consistent with information flowing from management to large‐holding fund families, the effect strengthens when Regulation Fair Disclosure enforcement is lax and when the information is favorable to the firm. Furthermore, the increased information advantage is associated with more management‐friendly voting behavior by these investors and a higher likelihood of target firms winning activist campaigns and retaining board seats. Overall, our findings are consistent with a potential quid pro quo in which investors’ access to information from management is associated with more pro‐management behavior

Effective policymakers must balance the demands of formulating a corporate tax system that raises revenue and spurs economic activity (e.g., investment) while promoting a “level playing field” across firms. Balancing these tradeoffs has likely caused tax systems to become more complex over time, increasing firms’ difficulty in understanding and complying with tax regulations. We investigate the impact of tax system complexity on the responsiveness of firm‐level investment to tax policy changes. Exploiting staggered tax rate changes and variation in tax system complexity across countries, we document two key findings. First, firm‐level investment is less sensitive to changes in the corporate tax rate when tax system complexity is higher, suggesting that such complexity can undermine the ability of tax policy to affect economic growth. Second, the impact of tax complexity on the sensitivity of investment to tax rate changes varies significantly across firms, with domestic‐owned, smaller, and private firms being more affected. These cross‐sectional disparities are consistent with tax system complexity potentially reducing tax system parity. Collectively, our findings suggest that corporate tax system complexity can negatively impact the ability of fiscal policy to affect investment and lead to heterogeneous tax policy responses across firms