Disclosure, Firm Growth, and the JOBS Act

93 Pages Posted: 14 May 2021 Last revised: 17 May 2021

See all articles by Anantha Divakaruni

Anantha Divakaruni

University of Bergen

Howard Jones

University of Oxford, Saïd Business School

Date Written: May 16, 2021


We study the effects of regulatory disclosure on investment and growth by comparing newly public firms before and after they lose disclosure exemptions under the Jumpstart Our Business Startups (JOBS) Act. Exempt firms invest more in physical assets, innovation, and acquisitions than firms that lose exemptions, but experience steeper declines in growth opportunities over time. Firms that lose exemptions exhibit better allocation of equity to investments and utilization of existing assets, which improves their Tobin’s q. Relaxing disclosure requirements seems to induce inefficiencies in managerial investment decisions and hence inhibits firms from exploiting or replenishing their growth opportunities.

Keywords: Information Disclosure, Initial Public Offerings, Regulation, Firm Financing, JOBS Act

JEL Classification: G14, G24, G28, G32

Suggested Citation

Divakaruni, Anantha and Jones, Howard, Disclosure, Firm Growth, and the JOBS Act (May 16, 2021). Available at SSRN: https://ssrn.com/abstract=3845468 or http://dx.doi.org/10.2139/ssrn.3845468

Anantha Divakaruni (Contact Author)

University of Bergen ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007

Howard Jones

University of Oxford, Saïd Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

HOME PAGE: http://www.sbs.ox.ac.uk/about-us/people/howard-jones

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