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Free to choose: Do voluntary audit reforms increase employment growth?
Dalarna University, School of Technology and Business Studies, Microdata Analysis.
Dalarna University, School of Technology and Business Studies, Economics. HUI Research.
Dalarna University, School of Technology and Business Studies, Business Administration and Management. Högskolan i Gävle.ORCID iD: 0000-0002-5043-6289
HUI Research.
2018 (English)In: Article in journal (Other academic) Submitted
Abstract [en]

Many European countries have abolished mandatory audits for small firms to reduce the regulatory and administrative burden for these firms. However, we still lack knowledge on whether such legislative changes affect employment growth for those firms that become free to choose to have external audits. We investigate this question using a Swedish reform that made audits voluntary for small firms fulfilling certain requirements. The reform created an almost ideal natural experiment, which we use to evaluate the effects of voluntary audits on employment growth for small firms using a difference-in-difference estimator. We find that firms which fulfilled the requirements for voluntary auditing, compared to a control group of similar firms that did not, increased their employment growth rate by 0.39%. This corresponds to 1,830 jobs being created in the year following the reform, suggesting that mandatory audits act as a growth barrier for small firms.

Place, publisher, year, edition, pages
2018.
Keywords [en]
Firm growth; small business economics; regulatory reform; mandatory audit
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
URN: urn:nbn:se:du-27352OAI: oai:DiVA.org:du-27352DiVA, id: diva2:1188210
Available from: 2018-03-07 Created: 2018-03-07 Last updated: 2018-03-29Bibliographically approved

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https://swopec.hhs.se/huiwps/abs/huiwps0131.htm

Authority records BETA

Huq, AsifDaunfeldt, Sven-OlovHartwig, Fredrik

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CiteExportLink to record
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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