This study investigates the changes in the riskiness of foreign firms listed in the U.S. following the passage of the Sarbanes-Oxley Act (SOX), legislation aimed at calming investor fears. While capital market measures of risk increase on average over a shorter-term period, total and unsystematic risk measures decrease on average over a longer-term period. Finding longer-term decreases in these risk measures is consistent with reductions in investor uncertainty. Further cross-sectional analyses show that foreign firms considered to be less uncertain at the time of SOX passage received the greatest risk reductions in the post-SOX period. Thus, it appears that the less uncertain foreign firms especially benefited from the heightened awareness and investor focus that occurred in conjunction with the passage of SOX.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 19 (2009) Issue (Month): 3 (July) Pages: 193-205 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF