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dc.contributor.advisorBhabra, Gurmeet
dc.contributor.authorKater, Sam Michiel Adrian
dc.date.available2012-09-20T21:41:02Z
dc.date.copyright2012
dc.identifier.citationKater, S. M. A. (2012). Did the Sarbanes-Oxley Act of 2002 lead to More Optimal Financing Decisions? (Thesis, Master of Business). University of Otago. Retrieved from http://hdl.handle.net/10523/2457en
dc.identifier.urihttp://hdl.handle.net/10523/2457
dc.description.abstractThis study empirically examines whether the adoption of the Sarbanes-Oxley Act of 2002 (SOX) led to subsequent improvements in financing decisions of firms. The provisions in SOX are likely to improve the corporate governance of firms which, consistent with the entrenchment hypothesis, should result in firms increasing leverage and reducing debt maturity. While I find that market leverage falls after the enactment of SOX, firms non-compliant with the board and committee independence provision significantly increase leverage more than compliant firms. Furthermore, firms non-compliant with the related party transaction and financial reporting provisions significantly reduce their debt maturity more than compliant firms. These findings are consistent with the premise that the mandated tightening of governance was the greatest benefit to those firms with the weakest governance structures. In contrast I find some evidence of the substitution hypothesis, as firms that are non-compliant with the financial reporting provision significantly reduce leverage more than compliant firms. However this relatively larger leverage decrease of non-compliant firms is concentrated among small firms, that I contend are seeking to reduce firm risk post-SOX through leverage reductions.
dc.language.isoen
dc.publisherUniversity of Otago
dc.rightsAll items in OUR Archive are provided for private study and research purposes and are protected by copyright with all rights reserved unless otherwise indicated.
dc.subjectCorporate governance
dc.subjectCapital structure
dc.titleDid the Sarbanes-Oxley Act of 2002 lead to More Optimal Financing Decisions?
dc.typeThesis
dc.date.updated2012-09-20T03:14:40Z
dc.language.rfc3066en
thesis.degree.disciplineAccountancy and Finance
thesis.degree.nameMaster of Business
thesis.degree.grantorUniversity of Otago
thesis.degree.levelMasters
otago.interloanno
otago.openaccessAbstract Only
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