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  • February 2010
  • Other Article
  • Journal of Accounting & Economics

The Chilling Effect of Sarbanes Oxley: A Discussion of Sarbanes-Oxley and Corporate Risk-Taking

By: Aiyesha Dey
  • Format:Print
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Abstract

Bargeron, Lehn, and Zutter [2009. Sarbanes–Oxley and corporate risk-taking. Journal of Accounting and Economics, forthcoming] document that as compared with non-US firms, risk-taking by publicly traded companies in the US declined after the passage of the Sarbanes–Oxley Act in 2002 (SOX). They conclude that this decline is related to board structure, firm size, and research and development expenditures. In my view, Bargeron, Lehn, and Zutter tackle an important question and provide carefully conducted analyses. However, as my discussion highlights, the question is difficult to answer, and as in similar studies on SOX, the evidence needs to be interpreted with caution.

Keywords

Risk; Corporate Risk-taking; Risky Investments; Risk and Uncertainty

Citation

Dey, Aiyesha. "The Chilling Effect of Sarbanes Oxley: A Discussion of Sarbanes-Oxley and Corporate Risk-Taking." Journal of Accounting & Economics 49, nos. 1-2 (February 2010): 53–57.
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About The Author

Aiyesha Dey

Accounting and Management
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