Operational efficiency and firm-level regulatory intensity

This study examines whether firm-level operational efficiency shapes paperwork-based regulatory intensity, measured as the cost of complying with U.S. federal paperwork requirements. Using U.S. firm data from 1993 to 2019, we find that more efficient firms face lower regulatory intensity. This relation is stronger when firms exhibit higher information quality, as reflected in more accurate management forecasts and more readable disclosures, consistent with an information-based mechanism. Additional lead-lag analyses and a difference-in-differences design exploiting CEO deaths further strengthen the robustness of our baseline findings. Overall, our findings highlight operational efficiency and firms’ information environments as important determinants of paperwork-based regulatory burden.