Correction to “How Does Financial‐Reporting Regulation Affect Industry‐Wide Resource Allocation?”

ABSTRACT This correction describes errors in the program code of Breuer [2021] and presents revised results. The errors affect the construction of the standardized reporting and auditing scopes, the treatment variables of the primary research design in Breuer [2021]. The revised results show weaker evidence that reporting mandates facilitate ownership dispersion in capital markets compared to Breuer [2021]. They also show weaker evidence that reporting mandates spur competition in product markets, including mixed evidence on product‐market entry. Consistent with Breuer [2021], the revised results continue to show no unambiguous evidence that reporting mandates improve the efficiency of industry‐wide resource allocation. With respect to audit mandates, the revised results continue to show evidence that the mandates impose a barrier to entry. Overall, the correction indicates that the impacts of reporting and auditing mandates are even more uncertain than reported in Breuer [2021] and that further research on these impacts is called for.