The Innovation and Reporting Consequences of Financial Regulation for Young Life-Cycle Firms

Over the last several decades, financial regulators have increaAdd Newsed governance and reporting requirements for publicly listed firms, frequently with the goal of improving the reliability of financial information available to investors. The implicit assumption in such regulation is that the benefits of improved financial reporting to financial statement users exceed the direct and indirect costs borne by the implementing firms. Former SEC Chair Mary Jo White articulated this trade-off in a 2016 speech at the SEC-Rock Center’s Silicon Valley Initiative: “[P]art of the SEC’s mission is to facilitate capital formation, so it is important that our rules … Read more