Journal of Banking & Finance Vol. 32 No. 10 2008
Influence of disclosure and governance on risk of US financial services firms following Sarbanes-Oxley
Abstract
This study finds significant changes in capital market measures of risk following the passage of Sarbanes-Oxley for US financial services firms. Shorter-term measures of risk shifts are positive, on average, and consistent with the mandatory nature of the disclosure and governance provisions. Longer-term total and unsystematic risk shifts are negative, on average, and consistent with reductions in investor uncertainty as transparency improved. We find that the changes in shorter-term and longer-term risk measures vary inversely with the strength of disclosure and governance characteristics. The financial market rewarded (punished) firms with stronger (weaker) disclosure and stronger (weaker) governance.
- DOI
- 10.1016/j.jbankfin.2007.12.037
- Volume
- 32
- Issue
- 10
- Pages
- 2124-2135
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref