The Effect of Regulatory Harmonization on Cross-border Labor Migration: Evidence from the Accounting Profession
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.
We appreciate the helpful comments of Mary Barth, Jannis Bischof, Matthias Breuer, Willem Buijink, Richard, Crowley, Scott Emett, Joachim Gassen, Chris Hansen, Alan Jagolinzer, Morris Kleiner, Michael Welker, Steve Zeff as well as workshop participants at Bristol University, University of Chicago, Colorado Summer Accounting Research Conference, Cornell University, EAA Annual Congress 2015, University of Exeter, Frankfurt School of Finance and Management, Global Issues in Accounting Conference 2014, IHW Halle, University of Illinois at Urbana-Champaign, Lancaster University, London Business School, University of Manchester, University of Paderborn, Queen’s University, Rice University, Erasmus University Rotterdam, Vienna University of Economics and Business, WHU, XI Workshop on Empirical Research in Financial Accounting and University of Zurich. This study is based on data from Eurostat, Labour Force Survey, 2002-2010. The responsibility for all conclusions drawn from the data lies entirely with the authors. We thank Marie Johann (DAAD) for kindly providing data on the Erasmus program. Christian Leuz gratefully acknowledges research funding provided by the Initiative on Global Markets (IGM) at the University of Chicago Booth School of Business. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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
Households and Firms
Consumption and Investment
International Factor Mobility
Globalization and International Relations
Labor Market Structures
Unemployment and Immigration
Law and Economics
Accounting, Marketing, and Personnel