ABSTRACT This study provides novel evidence on the magnitude of switching costs in auditing. Using a discrete choice approach, we infer switching costs from clients’ audit firm choices. The demand estimation reveals that switching costs are significant and vary by direction, with the highest costs associated with switching from non-Big 4 to Big 4 audit firms. Counterfactual analyses of forced switches suggest that switching costs are substantial, ranging from 0.7 billion U.S. dollars (14.2 percent of audit fees) to 1.2 billion U.S. dollars (24.0 percent of audit fees) when aggregated across all clients. Counterfactual analyses of voluntary switching show that the audit market would become highly dynamic and more concentrated if switching costs were removed. Additionally, clients would gain consumer surplus of up to 306 million U.S. dollars (5.4 percent of audit fees) in such a scenario. Overall, our study documents the importance of switching costs for understanding audit market dynamics. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M42; M48; L11; L84.

中文翻译：

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审计中的转换成本和市场力量：来自结构性方法的证据


摘要这项研究为审计中转换成本的大小提供了新的证据。使用离散选择方法，我们从客户的审计公司选择中推断出转换成本。需求估计显示，转换成本很高，并且因方向而异，其中从非四大会计师事务所转换到四大会计师事务所的成本最高。对强制转换的反事实分析表明，所有客户的转换成本总计为 7 亿美元（占审计费用的 14.2%）到 12 亿美元（占审计费用的 24.0%）不等。对自愿转换的反事实分析表明，如果消除转换成本，审计市场将变得高度动态且更加集中。此外，在这种情况下，客户将获得高达 3.06 亿美元的消费者剩余（审计费用的 5.4%）。总的来说，我们的研究证明了转换成本对于理解审计市场动态的重要性。数据可用性：数据可从文中引用的公共来源获得。 JEL 分类：M42； M48； L11； L84。