Thursday, June 28, 2007

SOX, IPOs and Corporate Risk Taking: Part 3 of 3

A give-and-take of critical feedback on new research studies is the medium by which academics are able to constantly improve the quality of their research. Typically working paper presentations take place in closed forums and the feedback received is used to improve upon the paper before it is released to the public.
As such, the AEI forum is unique in that it allowed both the draft working paper and the comments to be freely available on the web for perusal and comment.

All this is by way of saying that my post was not meant to single out the study for criticism, but instead to use the study and its responses to highlight the important and very topical question of SOX's impact on corporates. I believe Dr.Calomiris in his review of the paper said it best: "There are still potential alternative explanations for the ...results, and there are things the authors can do to make the results more convincing."
In the meantime, all those people out there claiming that SOX has hurt our corporates will just have to back up their claims with hard data. I'm with Doidge, Karolyi and Stulz myself.

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