Regulating the audit market in the European Union: who dominates, who loses?

This paper examines the role of interest groups in the regulation of the European audit market, clarifying patterns of business influence in European Union policy-making. Building on recent innovations in measuring policy preferences, the conditions are analyzed under which interest groups were most successful in attaining their preferences during the policy-making process. Existing methods for measuring interest group influence are refined by disaggregating the unit of analysis from the level of a unitary policy dimension to distinct issues featured in a single legislation and by differentiating between large firms and SMEs rather than assuming homogenous business interests. The results indicate that issue dynamics are central factors in determining interest group success: while larger coalitions seem to be more advantageous to large firms compared to SMEs and public authorities, high issue salience decreases the success of large business.