Going-Private Decisions and the Sarbanes-Oxley Act of 2002: A Cross-Country Analysis

Ehud Kamar
Pinar Karaca-Mandic
Eric L. Talley, Columbia Law School


This report investigates whether the regulatory regime created by the Sarbanes-Oxley Act of 2002 (SOX) has driven firms in general, and small firms in particular, out of the public capital market. Previous attempts to address this question have had difficulty controlling for other factors that could have affected exit decisions aroung the enactment of SOX. To address this difficulty, we examine the post-SOX change in the propensity of public American target firms to favor private acquirers over public ones with the corresponding change for foreign target firms, which were outside the purview of SOX. Our findings are consistent with the hypothesis that SOX induced small firms, by contrast, do not appear to have been affected. (Publication abstract)