We document that firms' management of accounting earnings increased steadily from 1987 until the passage of the Sarbanes Oxley Act (SOX), with a significant increase during the period prior to SOX, followed by a significant decline after passage of SOX. However, the increase in earnings...

This article characterizes insider trading in controlled firms as an agency problem. Using a standard agency model of corporate value diversion through insider trading by a controlling shareholder, I derive testable hypotheses about the relationship between corporate value and insider trading...

Why do some countries suffer from backward financial institutions and weak corporate governance rules? We show that, even if, overall, the economy would benefit corporate governance reforms, not all the agents would stand to gain from the improvement. In particular, entrepreneurs and firms that...

This Article documents and analyzes a powerful form of regulatory competition - competition for investments - that has transformed national corporate laws in the European Union in recent years. Unlike competition for incorporations, competition for investments shapes corporate law when firms...

Lang, Raedy and Wilson (2006) examine the properties of U.S. GAAP accounting numbers provided by cross-listed firms and compare them to those of U.S. firms. Using a wide range of properties related to earnings management, timely loss recognition, and value relevance, LRW show that accounting...

This Article challenges the conventional wisdom that states compete for incorporations. Delaware aside, no state stands to gain meaningful tax revenues or legal business from chartering firms, and no state takes significant steps to attract incorporations. The explanation for this apathy lies in...

Since 2002, listed German corporations are legally obligated to declare annually their degree of conformity to the German Corporate Governance Code (GCGC). For a sample of (big) publicly traded German companies listed in DAX 30 and MDAX we examine whether there is a pricing effect connected to...

This paper discusses empirical evidence on the costs (and benefits) of the Sarbanes-Oxley Act (SOX), particularly from stock returns and firms' going-private decisions. Zhang (2006) analyzes stock returns around key legislative events and concludes that SOX and its provisions have imposed...

This article tests whether the Sarbanes-Oxley Act (quot;SOXquot;) affected the premium that investors are willing to pay for shares of foreign companies cross-listed in the United States. I find that from year-end 2001 (pre-SOX) to year-end 2002 (after SOX adoption), the Tobin's q and...