  |
|
|
||||
|
||||
Why Do Firms Go Dark? Causes and Economic Consequences of Voluntary SEC Deregistrations
Christian Leuz University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); University of Pennsylvania - Wharton Financial Institutions Center Alexander J. Triantis University of Maryland - Robert H. Smith School of Business Tracy Yue Wang University of Minnesota - Twin Cities - Carlson School of Management March 2008 ECGI - Finance Working Paper No. 155/2007 AFA 2006 Boston Meetings Paper Robert H. Smith School Research Paper No. RHS 06-045 Abstract: We examine a comprehensive sample of going-dark deregistrations where companies cease SEC reporting, but continue to trade publicly. We document a spike in going dark that is largely attributable to the Sarbanes-Oxley Act. Firms experience large negative abnormal returns when going dark. We find that many firms go dark due to poor future prospects, distress and increased compliance costs after SOX. But we also find evidence suggesting that controlling insiders take their firms dark to protect private control benefits and decrease outside scrutiny, particularly when governance and investor protection are weak. Finally, we show that going dark and going private are distinct economic events.
Keywords: SEC deregistration, Disclosure, Going private, Regulation, Private control JEL Classifications: G18, G38, K22, G39, M41, M45, M44, G14 Working Paper SeriesDate posted: October 24, 2005 ; Last revised: April 01, 2008Suggested CitationContact Information
|
|
||||||||||||||||||||||||||||||||
© 2009 Social Science Electronic Publishing, Inc. All Rights Reserved. Terms of Use Privacy Policy
This page was served by apollo 2 in 0.157 seconds.
Download
Facebook
Twitter
Digg
Del.icio.us
CiteULike
