Corporate Transparency Practices around the World: Measurement and Effects

Emanuele Colonnelli, Associate Professor of Finance and MV Advisors Faculty Fellow
Thomas Rauter, Assistant Professor of Accounting

We are working on an international survey of corporate transparency practices across 12 developed and developing countries. Corporate transparency (CT) is a considered to be crucial for firm productivity and growth. Policymakers and investors around the world argue that a lack of CT is the number one reason why firms are unable to access the capital needed for growth. Yet, a lack of data means there is little empirical evidence on these issues. In this project, we aim to comprehensively measure CT practices at a large international scale and examine the effects of these practices on firm productivity and growth. The goal of the survey is to comprehensively measure CT practices and associated adoption frictions using highly detailed face-to-face and phone interviews with owners, CFOs, and finance/accounting managers of medium-sized firms (between 20 and 1000 employees). The survey instrument is inspired by the World Management Survey (WMS) methodology (Bloom and Van Reenen 2007), but fundamentally distinct given the different topic of focus, upon which we enriched various aspects based on recent methodological advancements in the survey design, economics, and accounting/finance literatures. So far, the academic literature has almost exclusively focused on revealed preference measures of what publicly listed firms disclose to outsiders. This project will allow us to open the black box of how firms produce transparency, with a focus on private firms, which will be of relevance to several bodies of literature at the intersection of finance, economics, and accounting. For more details on the survey contents and methodology of the project, please see Thomas’s proposals from 2021.