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Kaserer C, Mettler A, Obernberger S (2011). The Impact of the Sarbanes-Oxley Act on the Cost of Going Public. BuR - Business Research, Vol. 4, Iss. 2, pp. 125-147, URN: urn:nbn:de:0009-20-32074
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%0 Journal Article %T The Impact of the Sarbanes-Oxley Act on the Cost of Going Public %A Kaserer, Christoph %A Mettler, Alfred %A Obernberger, Stefan %J BuR - Business Research %D 2011 %V 4 %N 2 %@ 1866-8658 %F kaserer2011 %X This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information. %L 330 %K IPO %K SOX %K asymmetric information %K auditing and legal fees %K bookbuilding %K flotation cost %K going public %K partial adjustment phenomenon %K propensity score matching %K selection bias %K underpricing %K underwriting fees %U http://nbn-resolving.de/urn:nbn:de:0009-20-32074 %P 125-147
Bibtex
@Article{kaserer2011,
author = "Kaserer, Christoph
and Mettler, Alfred
and Obernberger, Stefan",
title = "The Impact of the Sarbanes-Oxley Act on the Cost of Going Public",
journal = "BuR - Business Research",
year = "2011",
volume = "4",
number = "2",
pages = "125--147",
keywords = "IPO",
keywords = "SOX",
keywords = "asymmetric information",
keywords = "auditing and legal fees",
keywords = "bookbuilding",
keywords = "flotation cost",
keywords = "going public",
keywords = "partial adjustment phenomenon",
keywords = "propensity score matching",
keywords = "selection bias",
keywords = "underpricing",
keywords = "underwriting fees",
abstract = "This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information.",
issn = "1866-8658",
url = "http://nbn-resolving.de/urn:nbn:de:0009-20-32074"
}
RIS
TY - JOUR AU - Kaserer, Christoph AU - Mettler, Alfred AU - Obernberger, Stefan PY - 2011// TI - The Impact of the Sarbanes-Oxley Act on the Cost of Going Public JO - BuR - Business Research SP - 125 EP - 147 VL - 4 IS - 2 KW - IPO KW - SOX KW - asymmetric information KW - auditing and legal fees KW - bookbuilding KW - flotation cost KW - going public KW - partial adjustment phenomenon KW - propensity score matching KW - selection bias KW - underpricing KW - underwriting fees N2 - This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information. SN - 1866-8658 UR - http://nbn-resolving.de/urn:nbn:de:0009-20-32074 ID - kaserer2011 ER -
Wordbib
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ISI
PT Journal AU Kaserer, C Mettler, A Obernberger, S TI The Impact of the Sarbanes-Oxley Act on the Cost of Going Public SO BuR - Business Research PY 2011 BP 125 EP 147 VL 4 IS 2 DE IPO; SOX; asymmetric information; auditing and legal fees; bookbuilding; flotation cost; going public; partial adjustment phenomenon; propensity score matching; selection bias; underpricing; underwriting fees AB This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information. ER
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<abstract>This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information.</abstract>
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<topic>auditing and legal fees</topic>
<topic>bookbuilding</topic>
<topic>flotation cost</topic>
<topic>going public</topic>
<topic>partial adjustment phenomenon</topic>
<topic>propensity score matching</topic>
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Full Metadata
| Bibliographic Citation | BuR - Business Research, Vol. 4, Iss. 2, pp. 125-147 |
|---|---|
| Title | The Impact of the Sarbanes-Oxley Act on the Cost of Going Public (eng) |
| Author | Christoph Kaserer, Alfred Mettler, Stefan Obernberger |
| Language | eng |
| Abstract | This paper examines the impact of the Sarbanes-Oxley Act (SOX), a legal framework intended to increase transparency and accountability of listed companies, on the cost of going public in the US. We expect SOX to increase the direct cost of going public, but decrease the underpricing because of reduced asymmetric information. Our main results corroborate these hypotheses. First, we find an increase in the cost of going public of 90 bp of gross proceeds. Second, we record a reduction in underpricing of 6 pp, which is related to a reduced offer price adjustment. This supports our hypothesis that SOX represents a mechanism to reduce asymmetric information. |
| Subject | IPO, SOX, asymmetric information, auditing and legal fees, bookbuilding, flotation cost, going public, partial adjustment phenomenon, propensity score matching, selection bias, underpricing, underwriting fees |
| DDC | 330 |
| Rights | authorcontract |
| URN: | urn:nbn:de:0009-20-32074 |
