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The effect of audit reform on the employment growth of small Swedish limited companies: A natural experiment
Dalarna University, School of Technology and Business Studies, Microdata Analysis.
Dalarna University, School of Technology and Business Studies, Economics.
Dalarna University, School of Technology and Business Studies, Business Administration and Management.ORCID iD: 0000-0002-5043-6289
Dalarna University, School of Technology and Business Studies, Economics.
2017 (English)Conference paper, Oral presentation with published abstract (Refereed)
Abstract [en]

Reducing the regulatory burden for firms will free resources that can be used for productive investments. In this paper, we investigate the effect of a change in regulations, in effect abolishing statutory audits for Swedish micro firms in November 2010, on employment growth in the affected micro firms. The changes in regulations created what we argue is an almost perfect natural experiment that can be exploited to evaluate the effects of the reform on employment growth using a difference-in-difference estimator. Our results show that employment growth is higher in firms which fulfil the requirements for voluntary auditing as compared to a control group of firms of similar sizes that does not, and the positive treatment effect is found for micro firms in all Swedish counties and in all types of industries. We estimate that the reform created 1276 jobs in the three years following the reform. We thus suggest that the current threshold for statutory audits should be increased in Sweden, whose threshold levels for statutory audits are significantly lower than in most other European countries even after the 2010 changes in regulations. Such a regulatory change would, in all likelihood, lead to employment growth in the affected firms. 

Place, publisher, year, edition, pages
2017.
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
URN: urn:nbn:se:du-23330OAI: oai:DiVA.org:du-23330DiVA, id: diva2:1044741
Conference
Conference of the Multinational Finance Society April 7-9, 2017, Lemesos, Cyprus
Available from: 2016-11-06 Created: 2016-11-06 Last updated: 2018-01-25Bibliographically approved

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Huq, AsifDaunfeldt, Sven-OlovHartwig, FredrikRudholm, Niklas

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • chicago-author-date
  • chicago-note-bibliography
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf