Do the Burdens to Being Public Affect the Investment and Innovation of Newly Public Firms?

• 成果类型: Article
• 署名作者: Dambra, Michael; Gustafson, Matthew
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3436
• 发表日期: 2021
• 页码: 594-616
• 关键词: MANDATORY DISCLOSURE; INVESTMENT; JOBS Act; IPO; research and development; INNOVATION

摘要

We examine how regulatory burdens affect the investment and innovation of newly public firms. To do so, we exploit the Jumpstart Our Business Startups (JOBS) Act, which eliminates certain disclosure, auditing, and governance requirements for a subset of newly public firms. Firms treated with these reduced burdens invest more and more efficiently after going public relative to untreated firms. These findings are concentrated in innovative investments and are nonexistent in dual-class firms. Overall, our findings suggest that the burdens to being public exacerbate agency frictions, which lead managers to take on fewer risky projects.