Firm risk and proxy fights: Evidence from SOX
Resource type
Authors/contributors
- Chen, Fang (Author)
- Huang, Jian (Author)
- Yu, Han (Author)
Title
Firm risk and proxy fights: Evidence from SOX
Abstract
The Sarbanes Oxley Act of 2002 (SOX) is documented to curb executive risk-taking and firm risk. Utilizing SOX as an exogenous shock on firm risk, we find that proxy fight threats are positively related to a firm’s total risk and idiosyncratic risk. Specifically, although firm risk generally decreases post-SOX, high proxy fight threats mitigate this change in firm risk. We also find that although firms adopt more conservative policies such as decreasing their leverage and payout post-SOX, these changes are mitigated by proxy fight threats. In sum, our findings indicate that proxy fights act as an external disciplinary mechanism, encourage executive risk-taking, and increase firm risk.
Publication
Accounting and Finance Research
Date
2018-02-09
Volume
7
Issue
2
Pages
96
Journal Abbr
AFR
Citation Key
chenFirmRiskProxy2018
Accessed
10/8/19, 2:45 PM
ISSN
1927-5994, 1927-5986
Short Title
Firm risk and proxy fights
Library Catalog
DOI.org (Crossref)
Extra
0 citations (Crossref) [2023-10-31]
Citation
Chen, F., Huang, J., & Yu, H. (2018). Firm risk and proxy fights: Evidence from SOX. Accounting and Finance Research, 7(2), 96. https://doi.org/10.5430/afr.v7n2p96
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