ESSAYS ON THE SARBANES-OXLEY ACT AND FOREIGN ISSUERS LISTED IN THE U.S.: MARKET VALUE AND INFORMATION MEASURES

This dissertation studies foreign firms shareholder value and earnings-related information measures in relation with the implications of the Sarbanes-Oxley Act of 2002. Chapter One addresses the value implications and empirically tests the changes in market values of foreign firms around SOX related announcements, and how it varies across home country legislative characteristics. My findings on market reactions provide mixed evidence. SOX related announcements exhibit the expected sign, but statistical significant is limited. Results from cross-sectional analysis are partially aligned with the bonding hypothesis implications. My findings suggest that the market reaction for cross-listed firms from countries with common-law origin and, consequently, better investor protection is not statistically different than firms from civil law originated jurisdictions and, consequently, weaker investor protection. Chapter Two studies the earnings-related information environment for foreign firms following the enactment of SOX Act in comparison with earlier periods. In particular, I empirically analyze the change in forecast accuracy, dispersion among the analysts forecasts, and the informativeness of earnings announcements. My analysis suggests there was no significant improvement or deterioration in forecast accuracy and informativeness of earnings announcement in the post-SOX period relative to pre-SOX period. However, my findings suggest some improvement in forecast dispersion of foreign firms for the post-SOX period.