Going-Private Decisions and the Sarbanes-Oxley Act of 2002. A Cross-Country Analysis
Abstract
This report investigates whether the regulatory regime created by the Sarbanes-Oxley Act of 2002 (SOX) has driven firms in general, and small firms in particular, out of the public capital market. Previous attempts to address this question have had difficulty controlling for other factors that could have affected exit decisions around the enactment of SOX. To address this difficulty, we examine the post-SOX change in the propensity of public American target firms to favor private acquirers over public ones with the corresponding change for foreign target firms, which were outside the purview of SOX. Our findings are consistent with the hypothesis that SOX induced small firms to exit the public capital market during the first year of its enactment. Large firms, by contrast, do not appear to have been affected.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 2005
- Accession Number
- ADA440531
Entities
People
- Ehud Kamara
- Eric Talley
- Pinar Karaca-mandic
Organizations
- RAND Corporation