Research Repository

Regulatory Competition and Rules/Principles Based Regulation

Instefjord, N and Frantz, P (2018) 'Regulatory Competition and Rules/Principles Based Regulation.' Journal of Business Finance and Accounting, 45 (7-8). 818 - 838. ISSN 0306-686X

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Abstract

This paper analyses how regulatory competition affects principles based and rules based systems of regulation. Competition between regulators creates the possibility of regulatory arbitrage that generates a race to the bottom by regulators that is socially harmful. We derive the welfare effects of such competition and the regulatory responses to these effects, in particular, regulatory harmonisation. These effects can make coordination efforts in developing global regulation socially desirable. We demonstrate, moreover, that corporate lobbying is not always harmful: it can both encourage and discourage socially desirable regulation.

Item Type: Article
Uncontrolled Keywords: Corporate lobbying, Principles based regulation, Regulatory arbitrage, Regulatory harmonisation, Rules based regulation
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 08 Feb 2018 14:24
Last Modified: 02 Oct 2018 10:15
URI: http://repository.essex.ac.uk/id/eprint/21392

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