An exploratory study of US acquirers’ market performance: pre- versus post-Sarbanes–Oxley act of 2002

Purpose Motivated by the findings of Bhabra and Hossain (2017) that highlight an improvement in US market performance post-Sarbanes–Oxley (SOX) period, this paper aims to investigate how change varies with methods payment used for deals. Design/methodology/approach Deductive nature using event study approach, uses a sample 675 deals between 1999 2006 test three research hypotheses pre-post setting. Findings Results show at aggregate level, there is significant acquirers around announcement day aftermath passage SOX 2002. Considered separately, both stock cash did not experience any period. These results are robust controlling governance, firm deal variables, as well industry year fixed effects. Research limitations/implications Exploratory nature, be interpreted light size period under investigation. Practical implications The provide evidence regulators legislators on contribution 2002 curbing managerial misconduct. Significant also signals more confidence decisions reduction agency problems. insignificant acquirers’ can indication policymakers should exert efforts improve shareholders' quality disclosure. Originality/value This investigation provides unique insights whether has been effective mitigating mispricing concerns associated stock-financed acquisitions it was moderating governance mechanism cash-financed acquisitions.