Firm Size, Institutional Quality and the Impact of Securities Regulation

43 Pages Posted: 17 Mar 2010 Last revised: 21 Nov 2014

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

April M. Knill

Florida State University College of Business; Florida State University - College of Law

Nela Thomas Richardson

Commodity Futures Trading Commission (CFTC)

Date Written: January 24, 2011

Abstract

We examine the influence of both public and private enforcement of securities regulation on securities issuance across firm size and institutional quality. We conjecture that in G10 countries with strong institutional environments, private enforcement benefits large firms more than small firms, while public enforcement facilitates small firm security issuance. In weak institutional environments in non-G10 countries where information asymmetries between firms and investors are more pronounced, mandated private enforcement disclosure requirements are relatively more beneficial to opaque smaller firms. Stronger public enforcement gives rise to larger firms raising capital internationally both among G10 and non-G10 countries. A newly assembled dataset of 42,337 firms across 46 countries spanning the years 1996-2007 is consistent with these predictions.

Keywords: Securities regulation, law and finance, access to finance, capital issuance

JEL Classification: K22, G38

Suggested Citation

Cumming, Douglas J. and Knill, April M. and Richardson, Nela Thomas, Firm Size, Institutional Quality and the Impact of Securities Regulation (January 24, 2011). Available at SSRN: https://ssrn.com/abstract=1572655

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

April M. Knill

Florida State University College of Business ( email )

Tallahassee, FL 32306-1042
United States
(850) 644-2047 (Phone)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

Nela Thomas Richardson (Contact Author)

Commodity Futures Trading Commission (CFTC) ( email )

1155 21st Street NW
Washington, DC 20581
United States

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