An examination of the impact of the Sarbanes–Oxley Act on the attractiveness of U.S. capital markets for foreign firms

Autor:	Yong George Yang, Emre Carr, Peter Hostak, Thomas Z. Lys
Rok vydání:	2013
Předmět:	Corporate finance Compliance cost Cross listing Shareholder Accounting Corporate governance Agency cost Sarbanes–Oxley Act Financial system Business General Business Management and Accounting Capital market
Zdroj:	Review of Accounting Studies. 18:522-559
ISSN:	1573-7136 1380-6653
DOI:	10.1007/s11142-013-9222-2
Popis:	We examine whether voluntary deregistrations after the passage of Sarbanes–Oxley Act of 2002 (SOX) were intended to benefit common shareholders by avoiding firms’ costs of complying with SOX or to protect the control rents of managers or controlling shareholders (MCOs). We find that, compared with foreign firms that maintained their SEC registrations, foreign firms that voluntarily deregistered on average had weaker corporate governance, had a significantly less negative stock market reaction when SOX was passed, and suffered a significant price decline when they announced their decision to deregister. We also find evidence indicating that the deregistrations were (to a lesser extent) motivated by firms’ compliance costs related to SOX. Taken together, our results suggest that both agency costs (that is, private benefit of control of the MCOs) and the compliance cost of SOX play a role in motivating foreign firms to withdraw from the U.S. market.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::9424f98be41e8a57b18c25be0aec291b https://doi.org/10.1007/s11142-013-9222-2 Zobrazit plný text záznamu Plný text ve formátu PDF