The Sarbanes-Oxley act and corporate investment: A structural assessment

• 成果类型: Article
• 署名作者: Kang, Qiang; Liu, Qiao; Qi, Rong
• 署名单位: University of Hong Kong; University of Miami; St. John's University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.02.002
• 发表日期: 2010
• 页码: 291-305
• 关键词: sarbanes-oxley act; Investment Euler equation; Investment-implied discount rate; corporate governance

摘要

We assess the impact of the Sarbanes-Oxley Act of 2002 on corporate investment in an investment Euler equation framework. We allow a dummy for the passage of the Act to affect the rate at which managers discount future investment payoffs. Using generalized method of moments estimators, we find that the rate U.S. firm managers apply to discount investment projects rises significantly after 2002, while the discount rate for U.K. firms remains unchanged. The effects of the legislation on corporate investment are asymmetric, and are much more significant among relatively small firms. We also find that well-governed firms, firms with a credit rating, and accelerated filers of Section 404 of the Act have become more cautious about investment. (C) 2010 Elsevier B.V. All rights reserved.