Sarbanes-Oxley and corporate risk-taking
We empirically examine whether risk-taking by publicly traded US companies declined significantly after adoption of the Sarbanes-Oxley Act of 2002 (SOX). Several provisions of SOX are likely to discourage risk-taking, including an expanded role for independent directors, an increase in director and officer liability, and rules related to internal controls. We find several measures of risk-taking decline significantly for US versus non-US firms after SOX. The magnitudes of the declines are related to several firm characteristics, including pre-SOX board structure, firm size, and R&D expenditures. The evidence is consistent with the proposition that SOX discourages risk-taking by public US companies.
Year of publication: |
2010
|
---|---|
Authors: | Bargeron, Leonce L. ; Lehn, Kenneth M. ; Zutter, Chad J. |
Published in: |
Journal of Accounting and Economics. - Elsevier, ISSN 0165-4101. - Vol. 49.2010, 1-2, p. 34-52
|
Publisher: |
Elsevier |
Keywords: | Sarbanes-Oxley Legislative policy Corporate risk-taking Investment policy |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Sarbanes-Oxley and corporate risk-taking
Bargeron, Leonce, (2010)
-
Sarbanes-Oxley and corporate risk-taking
Bargeron, Leonce L., (2010)
-
Employee-management trust and M&A activity
Bargeron, Leonce, (2015)
- More ...