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SOX leaves markets unharmed, says study

By Dina Hampton

April 27, 2007 12:40 pm ET

The much-assailed 2002 Sarbanes-Oxley Act has not made U.S. markets less competitive, according to a study cited in The Wall Street Journal today.

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The study looked at thousands of companies that either listed -- or didn't list -- their stocks on various U.S. and London markets from 1990 to 2005.

Authors Andrew Karolyi and René Stulz of Ohio State University and Craig Doidge of the University of Toronto found no evidence that U.S. markets have suffered due to the increased regulatory burdens imposed by the law.

Additionally, the study concluded that investors are still willing to pay a sizable premium for foreign-company shares listed in the U.S., in return for meeting tough U.S. regulatory standards, according to the Journal.

"All of our evidence is consistent with the theory that there is a distinct governance benefit for firms that list on the U.S. exchanges," said the authors in the report.

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