The robustness of the Sarbanes Oxley effect on the US capital market

• 成果类型: Article; Proceedings Paper
• 署名作者: Hansen, Bowe; Pownall, Grace; Wang, Xue
• 署名单位: Emory University; University System Of New Hampshire; University of New Hampshire
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-009-9094-7
• 发表日期: 2009
• 页码: 401-439
• 关键词: free cash flow; ACT

摘要

We examine the incidence of new listings and delistings on U.S. stock exchanges and firms' propensity to delist, as a function of general market conditions, firm fundamentals, and the costs of compliance with the Sarbanes Oxley Act (SOX). We find that both general market conditions and firm fundamentals explain the delisting incidence and firms' delisting decisions; while SOX variables are positively associated with firms' delisting likelihood only when general market conditions are not included in the analyses. Further analyses on the population partitioned into size quintiles suggest that the passage of SOX was not associated with an increase in the likelihood of delisting for any size quintile of firms and that the implementation of SOX section 404 is positively associated with the delisting likelihood for midsized and larger firms. Our empirical evidence is useful to regulators as they consider changes in the imposition and implementation of SOX section 404.