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The Burden of Being Public: Evidence from Local Labor Markets

50 Pages Posted: 8 Aug 2017  

Andrew Bird

Carnegie Mellon University

Stephen A. Karolyi

Carnegie Mellon University - David A. Tepper School of Business

Thomas G. Ruchti

Carnegie Mellon University - David A. Tepper School of Business

Date Written: August 4, 2017

Abstract

We exploit rich panel data on employment across occupations and quasi-natural variation based on IPO completion to quantify the direct labor cost of regulatory compliance for public companies. We find that IPOs have no effect on local employment, on average, but we precisely estimate a small employment effect for accounting and auditor occupations. We estimate that the annual labor cost of regulatory compliance is less than $1M for the average public firm, but also is highly sensitive to capital markets regulation. Our estimates cannot reconcile firm's self-reported regulatory burden and removes labor costs from the list of first order listing status determinants.

Keywords: Initial Public Offerings, Labor Demand, Compliance Costs, Regulation, Sarbanes-Oxley Act, JOBS Act

JEL Classification: G32, G38, J21, J44, M13, M51

Suggested Citation

Bird, Andrew and Karolyi, Stephen A. and Ruchti, Thomas G., The Burden of Being Public: Evidence from Local Labor Markets (August 4, 2017). Available at SSRN: https://ssrn.com/abstract=3013835

Andrew Bird

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Stephen Karolyi

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
4122682909 (Phone)

Thomas Ruchti (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

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