AUDIO

In a June conference at AEI, Kenneth Lehn and his colleagues at the University of Pittsburgh presented a paper suggesting that risk-taking by U.S. corporations has declined since the adoption of the Sarbanes-Oxley Act. The Lehn paper compared U.S. companies with similar companies in the United Kingdom and found a reduction in risk-taking in the U.S. group in a number of dimensions. Now, a study by Katherine Litvak of the University of Texas at Austin School of Law compares foreign companies that are cross-listed in the U.S--and thus subject to Sarbanes-Oxley--with similar companies from the same countries that are not required to comply with Sarbanes-Oxley. Like Lehn et al., she found that since the adoption of Sarbanes-Oxley, companies subject to it are avoiding the risk-taking ultimately responsible for economic growth. Speakers at this conference will review the Litvak study and its significance for the Sarbanes-Oxley debate.