Magazine article Business Credit

SOX Fails to Hurt U.S. Markets, Exemptions Rejected

Magazine article Business Credit

SOX Fails to Hurt U.S. Markets, Exemptions Rejected

Article excerpt

While the Sarbanes-Oxley Act (SOX) has received waves of criticism from the business community, mainly stemming from the thought that the Act's requirements would pose a threat to the global competitiveness of U.S. stock markets, a new study indicates that the legislation has not done what so many have said it would. SOX has made the U.S. market no less competitive now than they were before the law's 2002 passage.

In the study, authors Andrew Karolyi and René Stulz of Ohio State University and Craig Doidge of the University of Toronto compared listings in New York and London's stock exchanges. "An exchange listing in New York has unique governance benefits for foreign firms," said the authors in the report. "These benefits have not been seriously eroded by SOX and cannot be replicated through a London listing."

"The argument that the U.S. exchanges have become less competitive only makes sense if some firms that would have listed in New York in the 1990s would no longer do so," said the report. …

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