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Discussion of “The robustness of the Sabarnes Oxley effect on the U.S. capital market”

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  • Trevor S. Harris

    (Columbia University)

Abstract

In this paper, I use anecdotal evidence and logical reasoning to suggest that, despite the use of an extensive database, it is not possible to conclude that passage of the Sarbanes Oxley Act did not have an impact on companies’ delisting decisions. Moreover, the instrumental variables used to proxy for SOX effects are too weak and suffer from a significant endogeneity problem given that passage of SOX was driven by many of the economic and control problems that are used to control for market and company factors. I also discuss some broader issues about the trade-off between large sample statistical inference and anecdotal analysis for addressing practical questions.

Suggested Citation

  • Trevor S. Harris, 2009. "Discussion of “The robustness of the Sabarnes Oxley effect on the U.S. capital market”," Review of Accounting Studies, Springer, vol. 14(2), pages 440-452, September.
    • Handle: RePEc:spr:reaccs:v:14:y:2009:i:2:d:10.1007_s11142-009-9099-2
    DOI: 10.1007/s11142-009-9099-2
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    References listed on IDEAS

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    1. Fama, Eugene F. & French, Kenneth R., 2004. "New lists: Fundamentals and survival rates," Journal of Financial Economics, Elsevier, vol. 73(2), pages 229-269, August.
    2. Leuz, Christian & Triantis, Alexander & Yue Wang, Tracy, 2008. "Why do firms go dark? Causes and economic consequences of voluntary SEC deregistrations," Journal of Accounting and Economics, Elsevier, vol. 45(2-3), pages 181-208, August.
    3. Craig Doidge & G. Andrew Karolyi & Rene M. Stulz, 2007. "Has New York Become Less Competitive in Global Markets? Evaluating Foreign Listing Choices Over Time," NBER Working Papers 13079, National Bureau of Economic Research, Inc.
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