How much does licensing as a form of access regulation influence labor market opportunities, salary potential and audit quality of financial market actors such as financial consultants or auditors? Do licensed market players act more sustainably and in the best interest of consumers? Can ethical behavior be taught? Based on Big Data from the USA, Felix Vetter investigates these and other questions in his dissertation “Financial Gatekeeper Regulation”. For his outstanding scientific work, he is being awarded the 2021 Young Talent Award by the Association of University Teachers of Business Administration. The award, which is endowed with 2,500 euros and sponsored by MLP Finanzberatung SE, will be granted at the digital annual general meeting of the Business Administration Association on 16 March 2021.
In principle, licensing should primarily serve to protect consumers, for example by ensuring that only persons who have received special training are licensed. Although licensing and regulation of financial market actors are a common phenomena in Germany, there is little scientific evidence on whether and to what extent they affect the quality of examinations and advice. Felix Vetter shows that although licensing requirements affect the wages and employment of auditors, they do not affect the quality of their services. He further finds that the ethically trained among U.S. consultants are less likely to engage in financial misconduct than those trained only in technical matters. Finally, he shows that increased licensing requirements in the form of peer reviews weaken the entrepreneurship of auditors, especially the independent work of young auditors.
Felix Vetter has been Junior Professor in the Area of Accounting & Taxation at the University of Mannheim since July 2020. Previously, he received his PhD from the London School of Economics and spent part of his doctoral studies at the University of Chicago – Booth School of Business. Large parts of his dissertation have already been published or accepted for publication in leading international journals such as the Journal of Financial Economics and the Journal of Accounting Research.