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The impact of investor protection law on corporate policy and performance: evidence from the blue sky laws

Agrawal, Ashwini K. (2013) The impact of investor protection law on corporate policy and performance: evidence from the blue sky laws. Journal of Financial Economics, 107 (2). pp. 417-435. ISSN 0304-405X

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Identification Number: 10.1016/j.jfineco.2012.08.019

Abstract

Recent studies have debated the impact of investor protection law on corporate behavior and value. I exploit the staggered passage of state securities fraud statutes (“blue sky laws”) in the United States to estimate the causal effects of investor protection law on firm financing decisions and investment activity. The statutes induce firms to increase dividends, issue equity, and grow in size. The laws also facilitate improvements in operating performance and market valuations. Overall, the evidence is strongly supportive of theoretical models that predict investor protection law has a significant impact on corporate policy and performance.

Item Type: Article
Official URL: https://www.journals.elsevier.com/journal-of-finan...
Additional Information: © 2012 Elsevier B.V
Divisions: Finance
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HG Finance
K Law > K Law (General)
JEL classification: G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General
G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting; Fixed Investment and Inventory Studies
G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
K - Law and Economics > K2 - Regulation and Business Law > K22 - Corporation and Securities Law
Sets: Departments > Finance
Collections > Economists Online
Date Deposited: 01 Mar 2017 15:04
Last Modified: 20 Feb 2019 10:44
URI: http://eprints.lse.ac.uk/id/eprint/69607

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