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discusses: (i) firm-specific (micro-economic) costs and benefits arising from firms‟ voluntary disclosure activities, (ii) potential (macro-economic) market-wide costs and benefits of firms‟ voluntary disclosure activities, and (iii) aggregate costs and benefits of regulating and enforcing firms‟ financial reporting and disclosure activities in global capital markets. The survey is organized as follows. Section 2 reviews the theoretical literature on the firm-specific costs and benefits of disclosure, the market-wide costs and benefits of financial reporting and disclosure, and costs and benefits of regulating these activities. In section 3, we review empirical studies on firms‟ disclosure choices. Section 4 presents and discusses empirical studies on changes in disclosure regulation and across country comparisons of disclosure regimes. Section 5 discusses new institutional research in accounting as well as recent studies on the adoption of International Financial Reporting Standards (IFRS) as these advances also help our understanding of the economic outcomes of financial reporting and disclosure regulation. Section 6 concludes the paper with an extensive discussion of suggestions for future research. 2. Theory of Corporate Disclosure and Reporting Regulation In this section, we outline the theory of firms‟ disclosure choices and the theory of disclosure regulation. We use a framework that first identifies possible firm-specific (microeconomic) and market-wide (macro-economic) costs and benefits of firms‟ disclosure activities in the absence of regulation. We then overlay the potential effects of disclosure and reporting regulation. Finally, we give some consideration to the question of how to mandate disclosures, i.e., the mechanism and at which level, and how to enforce the rules.

Both firm-specific and market-wide effects are relevant for evaluating the economic consequences of reporting and disclosure regulation. 4 The former are important because the confluence of firm-specific costs and benefits of voluntary disclosures determines whether they are beneficial to the firm, i.e., whether they increase firm value. However, the mere existence of net benefits to voluntary disclosure is not sufficient to justify mandatory disclosure because, in this case, a firm already has incentives to voluntarily provide information (e.g., Ross, 1979). That is, precisely in the situation where the firm-specific benefits exceed the costs, it is not clear that we need any regulation. Unfortunately, debates about disclosure and financial reporting

regulation often incorrectly point to firm-specific (net) benefits of voluntary disclosure choices rather than focus on the aggregate effects of regulation. However, firm-specific effects of disclosure can still be relevant in regulatory debates if (i) they inform us about the nature and form of the costs and benefits, (ii) they tell us how mandated disclosure can differentially affect firms (including potential wealth transfers among firms), and (iii) they help us predict which firms are likely to engage in avoidance strategies or may lobby for or against a proposed regulation given its differential effects on firms. Market-wide effects of firms‟ disclosures (in the absence of reg本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。