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| Author: | Kang, Q. Liu, Q. Qi, R. |
| Title: | The Sarbanes-Oxley act and corporate investment: a structural assessment |
| Journal: | Journal of Financial Economics
2010 : MAY, VOL 96:2, p. 291-305 |
| Index terms: | corporate governance discount rate investments USA United Kingdom |
| Freeterms: | The Sarbanes-Oxley act |
| Language: | eng |
| Abstract: | In this article, the effects of the Sarbanes-Oxley act of 2002 (a regulation meant to restore investor confidence in U.S. capital markets) on corporate investment. The authors use a generalized method of moments estimators to investigate the investment discount rate used by managers after the act. The results show that there is a significant rise in the discount rates applied by U.S. managers following the year 2002, but the rates used by U.K. managers remain unchanged. This effect is found to be stronger in small firms. According the results, the impacts of the Sarbanes-Oxley act are asymmetric. |
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