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The Effect of Regulatory Harmonization on Cross-border Labor Migration: Evidence from the Accounting Profession

Matthew J. Bloomfield, Ulf Brüggemann, Hans B. Christensen, Christian Leuz

NBER Working Paper No. 20888
Issued in January 2015, Revised in September 2016
NBER Program(s):Corporate Finance, Economics of Education, Labor Studies

The paper examines whether international regulatory harmonization increases cross-border labor migration. To study this question, we analyze European Union (EU) initiatives that harmonized accounting and auditing standards. Regulatory harmonization should reduce economic mobility barriers, essentially making it easier for accounting professionals to move across countries. Our research design compares the cross-border migration of accounting professionals relative to tightly-matched other professionals before and after regulatory harmonization. We find that international labor migration in the accounting profession increases significantly relative to other professions. We provide evidence that this effect is due to harmonization, rather than increases in the demand for accounting services during the implementation of the rule changes. The findings illustrate that diversity in rules constitutes an economic barrier to cross-border labor mobility and, more specifically, that accounting harmonization can have a meaningful effect on cross-border migration.

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Document Object Identifier (DOI): 10.3386/w20888

Published: Matthew J. Bloomfield & Ulf Brüggemann & Hans B. Christensen & Christian Leuz, 2017. "The Effect of Regulatory Harmonization on Cross-Border Labor Migration: Evidence from the Accounting Profession," Journal of Accounting Research, Wiley Blackwell, vol. 55(1), pages 35-78, March. citation courtesy of

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