Stock market reactions to the Japanese Sarbanes-Oxley Act of 2006

Kosuke Seino, Fumiko Takeda

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


This article investigates stock market reactions to announcements related to the introduction of the Financial Instruments and Exchange Law or the so-called Japanese Sarbanes-Oxley Act (J-SOX), which was enacted to reinforce corporate accountability and responsibility. We find that the announcements leading to the passage of the J-SOX raised stock prices of firms listed on the First Section of the Tokyo Stock Exchange. Another finding is that firms with a high ratio of foreign shareholders or leverage experienced more positive stock price reactions. By contrast, whether the firm was audited by Big 4 audit firms did not seem to matter to investors. In addition, large firms tended to have more negative stock price reactions than small firms.

Original languageEnglish
Pages (from-to)126-136
Number of pages11
JournalCorporate Ownership and Control
Issue number2 A
Publication statusPublished - 2009
Externally publishedYes


  • Corporate governance
  • Event study
  • Financial reporting
  • Internal control
  • Sarbanes-Oxley Act

ASJC Scopus subject areas

  • General Business,Management and Accounting


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