Capital-Market Effects of Securities Regulation: Prior Conditions, Implementation, and Enforcement / Hans B. Christensen, Luzi Hail, Christian Leuz.

Format:

Book

Author/Creator:

Christensen, Hans B.

Contributor:

Hail, Luzi.

Leuz, Christian.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w16737.

NBER working paper series no. w16737

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Capital-Market Effects of Securities Regulation

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

We examine the capital-market effects of changes in securities regulation in the European Union (EU) aimed at reducing market abuse and increasing transparency. To estimate causal effects for the population of EU firms, we exploit that for plausibly exogenous reasons, like national legislative procedures, EU 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.

Notes:

January 2011.

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