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The effect of audit reform on the employment growth of small Swedish limited companies: a natural experiment
Högskolan Dalarna, Mikrodataanalys.
Högskolan Dalarna, Nationalekonomi.
Högskolan Dalarna, Företagsekonomi.ORCID iD: 0000-0002-5043-6289
Högskolan Dalarna, Nationalekonomi.
2017 (English)Conference paper, Oral presentation only (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:hig:diva-28547OAI: oai:DiVA.org:hig-28547DiVA, id: diva2:1264220
Conference
Spring 2017 Conference of the Multinational Finance Society, 7-9 April 2017, Lemesos, Cyprus
Available from: 2018-11-19 Created: 2018-11-19 Last updated: 2018-12-03Bibliographically approved

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Hartwig, Fredrik

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Citation style
  • apa
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  • ieee
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Language
  • sv-SE
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  • en-US
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  • nn-NO
  • nn-NB
  • de-DE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf