%0 Journal Article %1 kaserer2011 %A Kaserer, Christoph %A Mettler, Alfred %A Obernberger, Stefan %D 2011 %J BuR - Business Research %K IPO SOX asymmetric-information auditing-and-legal-fees bookbuilding flotation-cost going-public partial-adjustment-phenomenon propensity-score-matching selection-bias underpricing underwriting-fees %N 2 %P 125-147 %T The Impact of the Sarbanes-Oxley Act on the Cost of Going Public %U http://www.business-research.org/2011/2/finance/3207/kaserer-impact.pdf %V 4 %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.

@article{kaserer2011, 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.}, added-at = {2012-01-13T10:52:20.000+0100}, author = {Kaserer, Christoph and Mettler, Alfred and Obernberger, Stefan}, biburl = {https://www.bibsonomy.org/bibtex/2b887e5274acdc2702edeeed3a0bc0237/usbk}, interhash = {e90829bbf3bb5c6127e1f5776134e6a9}, intrahash = {b887e5274acdc2702edeeed3a0bc0237}, journal = {BuR - Business Research}, keywords = {IPO SOX asymmetric-information auditing-and-legal-fees bookbuilding flotation-cost going-public partial-adjustment-phenomenon propensity-score-matching selection-bias underpricing underwriting-fees}, month = {December}, number = 2, pages = {125-147}, timestamp = {2012-01-13T11:06:06.000+0100}, title = {The Impact of the Sarbanes-Oxley Act on the Cost of Going Public}, url = {http://www.business-research.org/2011/2/finance/3207/kaserer-impact.pdf}, volume = 4, year = 2011 }