Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5087056 | Journal of Accounting and Economics | 2008 | 28 Pages |
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.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Christian Leuz, Alexander Triantis, Tracy Yue Wang,