Journal Article

Capital-Market Effects of Securities Regulation: Prior Conditions, Implementation, and Enforcement

Hans B. Christensen, Luzi Hail and Christian Leuz

in The Review of Financial Studies

Published on behalf of The Society for Financial Studies

Volume 29, issue 11, pages 2885-2924
Published in print November 2016 | ISSN: 0893-9454
Published online July 2016 | e-ISSN: 1465-7368 | DOI: https://dx.doi.org/10.1093/rfs/hhw055
Capital-Market Effects of Securities Regulation: Prior Conditions, Implementation, and Enforcement

More Like This

Show all results sharing these subjects:

  • International Finance
  • International Financial Markets
  • Financial Regulation
  • Corporate Governance
  • Law and Economics
  • Accounting

GO

Show Summary Details

Preview

We examine the capital-market effects of changes in securities regulation in the European Union aimed at reducing market abuse and increasing transparency. To estimate causal effects for the population of E.U. firms, we exploit that for plausibly exogenous reasons, such as national legislative procedures, E.U. countries adopted these directives at different times. We find significant increases in market liquidity, but the effects are stronger in countries with stricter implementation and traditionally more stringent securities regulation. The findings suggest that countries with initially weaker regulation do not catch up with stronger countries, and that countries diverge more upon harmonizing regulation.

Received August 3, 2015; accepted April 25, 2016, by Editor Andrew Karolyi.

Keywords: F30; G15; G18; G30; K22; M40

Journal Article.  20691 words.  Illustrated.

Subjects: International Finance ; International Financial Markets ; Financial Regulation ; Corporate Governance ; Law and Economics ; Accounting

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.