Establishing Transparency

Projects that are primarily related to the measurement of transparency and its determinants are grouped in project area A: “Establishing Transparency”. Project area A comprises three types of studies:

  1. studies that explore the level and nature of provided information and its effect on transparency, as well as the regulatory and institutional environment that shapes these phenomena; 
  2. studies that develop theories about the cause and effect mechanisms that shape information and transparency; and 
  3. empirical studies that test these theoretical predictions.

The findings of Project A will be instrumental in identifying potential boundaries of regulation: Is the public able to process complex accounting information? Do information intermediaries, such as financial analysts or the financial media, produce trustworthy information? How far do the roles of “traditional” intermediaries such as analysts differ from those of “new” intermediaries like crowd platforms? How do firms’ incentives affect reporting decisions and is this anticipated by the recipients of the information?

How do accounting and taxation

affect transparency?

Ulf Brüggemann

HU Berlin


Brüggemann explores how mandatory financial disclosure varies across countries and over time. Financial disclosures are subject to diverse regulatory regimes. Understanding the determinants of these regimes is instrumental to understanding what drives financial transparency in corporations. Project A01 will provide fruitful input to other TRR 266 projects, and to the academic community at large via the Open Science Data Center (C02), by constructing a comprehensive panel dataset that captures the variation in regulatory disclosure regimes. By exploring this dataset for systematic patterns, the project will also provide insights on the endogenous nature of disclosure regulation and, thus, on the transparency of corporations.

Anja Schöttner

HU Berlin


Thomas Kourouxous

former PI, now affiliated with University of Graz, TRR 266 Research Fellow


Organizational design is an important determinant of firm transparency. Kourouxous and Schöttner focus on recent organizational innovations that affect the workspace of firms. Many of these innovations endow lower-level employees with more responsibility for the coordination of work. Consequently, more production-relevant information is allocated to these employees, while higher-level decision-makers experience a reduction of transparency. A02 will systematically explore the consequences of these organizational phenomena on transparency within and between firms by factoring in the endogenous adjustment of managerial performance reporting, incentivization regimes and the firm’s tax environment.

Benedikt Franke

former PI, now affiliated with SKEMA Business School, TRR 266 Research Fellow



Reeyarn Li

Universität Mannheim

Franke and Li focus on factors that drive the transparency of textual financial reporting disclosures. Given the increased amount of textual financial disclosures in recent years, they will assess the availability, accuracy, and clarity of this information. They extend prior work by using bond-related disclosures and by singling out the effect of litigational concerns on the quality of textual information. Their key interest lies in exploring the cross-sectional variation of these textual disclosures and in understanding how textual disclosures are shaped by public equity and debt markets.

Stefan Reichelstein

Universität Mannheim


Anna Rohlfing-Bastian

Goethe Universität Frankfurt


Reichelstein and Rohlfing-Bastian strive to understand the nature of information that firms, regulators, and investors need to make, incentivize and monitor investment decisions. Since investment efficiency is a core objective of firms and regulators alike, the work of A04 explores a rational approach to regulatory rule making. Besides developing the reporting designs, A04 also uses archival and field data to explore whether regulators and firms establish reporting regimes that represent the key features of their theoretical designs.

Deborah Schanz

LMU Munich


Caren Sureth-Sloane

Universität Paderborn


Johannes Voget

Universität Mannheim


Schanz, Sureth-Sloane, and Voget study the determinants and variation of global tax complexity. They construct a country-level measure that covers the complexity of the tax code (tax regulations) and the tax framework (tax processes and features such as audits). They collect detailed data on facts and perceptions on tax complexity to compare and benchmark tax complexity and its determinants within and across countries as well as over time. A05 investigates the effects of tax complexity on firm’s tax compliance behavior and their investment decisions. Moreover, A05 exploits exogenous shocks to tax complexity in individual countries to identify causal effects.

Michael Ebert

Universität Paderborn

Dirk Simons

Universität Mannheim


Ebert and Simons model strategic voluntary disclosure behavior. They study this phenomenon in a variety of contexts, where institutional characteristics (e.g., the regulatory environment, features of financial information, enforcement agencies, the interplay of mandatory and voluntary disclosures, or situation-specific objectives of the disclosing firms) form the contexts. The work of A06 differs from prior theoretical work in this field by incorporating the institutional factors mentioned above. Its findings will be instrumental in predicting financial reporting disclosure behavior which shapes corporate transparency.

Katharina Hombach

Frankfurt School of Finance and Management

Thorsten Sellhorn

LMU Munich


Hombach and Sellhorn explore how decision makers cope with ambiguity about optimal reporting policy. They document the learning processes through which decision makers, such as managers, form expectations about the net payoffs of alternative reporting practices. A07 combines in-depth institutional knowledge about diverse reporting settings with existing theories of social learning. Methodologically, it draws on a broad set of methods including qualitative, simulation, and empirical-archival approaches. The findings of A07 will help explain how decision makers learn about the transparency effects of alternative reporting practices, and how this process affects the diffusion of these practices across firms and over time.

Holger Daske

Universität Mannheim


Daske uses linguistic methodology and large-scale analysis of textual data to explore whether stakeholder incentives and regulatory interventions can affect the standardization of textual financial reporting data. The level of standardization is a key determinant of information processing costs and thus a prime candidate to explain the efficiency of information reception by users of financial reporting information. Information may therefore need a certain level of standardization to cause transparency. A08 explores this link by studying how the level of standardization affects capital-market outcome measures of transparency.

Jannis Bischof

Universität Mannheim

Bischof studies how firm-specific and manager-specific preferences affect voluntary disclosure behavior. The project empirically investigates corporate risk disclosure behavior by focusing on recent political shocks such as the “Brexit” referendum or tax scandals. These political shocks serve as a suitable instrument to disentangle firm characteristics and manager characteristics, which typically overlap to a large extent. The settings also allow studying how investors improve transparency by acting on current and stale disclosure after experiencing unexpected shocks to their information environment.

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