서강대학교

초록/요약

This paper studies IPO and cross-listing behavior onto U.S. and U.K. Exchanges following the passage of the Sarbanes-Oxley Act. I tested three different hypotheses, which are as follows: the number of U.S. IPOs has significantly decreased following the passage of the Sarbanes-Oxley Act; there has been a reduction in the number of foreign firms cross-listing onto U.S. Exchanges following the Act; and finally there has been a dramatic rise in the London Stock Exchange following the Act. I find powerful evidence that the U.S. exchanges have experienced a decreased listing frequency of IPOs and foreign listing events following the Act. I find that a portion of the decline in foreign listings on the NASDAQ is attributable to firms choosing to bypass a U.S. Exchange and list on the London Stock Exchange’s Alternative Investment Market following the Act. With regards to the NYSE, the decline in listings doesn’t appear to be because of listings lost to the London Stock Exchange’s Main Market following the Act. The results are consistent with my theme that the Act has made the U.S. less competitive in international capital markets. Smaller and less profitable firms are affected most by the Act, due to the high costs of compliance. Many firms have been forced to list elsewhere. With every missing IPO in the U.S., that we may never know, it is greatly reducing productivity, growth and U.S. competiveness. The U.S. is also now facing greater competition from better home capital markets around the world, from places such as Brazil, Russia, India and China. The U.S. has to be aware of the better home capital markets around the world and make the needed regulatory changes to increase their competitiveness.