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Firm Value, Cross-Listing Premium and the Sarbanes-Oxley Act

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  • Marcelo Bianconi
  • Richard Chen

Abstract

This paper presents empirical evidence on the effects of the Sarbanes-Oxley Act of 2002 on the value of firms and on the cross-listing choice of firms destined to three major markets in North America, Asia and Europe. We use dynamic panel data methods and treatment effects methods to find that Sarbanes-Oxley has had a negative impact on the value of firms worldwide. However, the effect of Sox on the cross-listing decision is positive in the US destination and negative in the Germany destination; and the Hong Kong destination seems to attract cross-listing of firms with lower valuations relative to the US and Germany destination. In terms of the cross-listing decision, the evidence is in favor of crowding in the market where the accounting standards are better, lending support to the signaling and bonding hypotheses of cross-listing choice.

Suggested Citation

  • Marcelo Bianconi & Richard Chen, 2009. "Firm Value, Cross-Listing Premium and the Sarbanes-Oxley Act," Discussion Papers Series, Department of Economics, Tufts University 0738, Department of Economics, Tufts University.
    • Handle: RePEc:tuf:tuftec:0738
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    File URL: http://ase.tufts.edu/econ/research/documents/2009/bianconiFirmValue.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Marcelo Bianconi & Joe Akira Yoshino, 2015. "Firm value, investment and monetary policy," International Journal of Accounting and Finance, Inderscience Enterprises Ltd, vol. 5(3), pages 262-289.

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    More about this item

    Keywords

    Cross-listing; Sarbanes-Oxley; dynamic panel data; treatment effects.;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance

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