Public policy and venture capital: Pursuing the disclosure goal

Autor:	Vincenzo Verdoliva, Claudio Porzio, Belinda Laura Del Gaudio, Gabriele Sampagnaro
Rok vydání:	2020
Předmět:	business.industry media_common.quotation_subject Public policy Accounting Venture capital Readability law.invention law Value (economics) Market price CLARITY Business Management and Accounting (miscellaneous) Business Initial public offering Finance Reputation media_common
Zdroj:	Research in International Business and Finance. 51:101104
ISSN:	0275-5319
DOI:	10.1016/j.ribaf.2019.101104
Popis:	Using a sample of US firms that went public between 2000 and 2011, we conduct a textual analysis of 10-K filings to jointly evaluate the impact of the Sarbanes-Oxley Act and venture capital (VC) on the disclosure practices of both VC- and non-VC-backed IPOs. We find that the annual reports of VC-backed IPOs are much more readable than the annual reports of their peers. This finding suggests that VCs introduce more clarity into financial reporting to improve the reaction in the firm market price to create value and feed their own reputation. On the contrary, we find that the Sarbanes-Oxley Act forces firms to produce longer 10-Ks consistent with the aim of the reform (Title IV) to enhance financial disclosures. In turn, this ends up to negatively impact on the readability.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::337ce895962a982932dd7ff6d2f0d6d7 https://doi.org/10.1016/j.ribaf.2019.101104 Zobrazit plný text záznamu Full Text from ScienceDirect