Sarbanes-Oxley and the Evolution of State Takeover Laws: A Study of Opt-in and Opt-out Provisions Over Time

Article DOI: https://doi.org/10.57017/jaes.v20.1(87).01

Author(s):

Halil D. KAYA Department of Accounting and Finance, College of Business and Technology North-Eastern State University, USA
Engku N.S. ENGKUCHIK Engku N.S. ENGKUCHIK Department of Finance, College of Business Administration Prince Sultan University, Kingdom of Saudi Arabia

Abstract:

In this research, we examine the immediate and long-term implications of the Sarbanes-Oxley Act (SOX) on the provisions of state takeover laws. We gather the information from the 1998–2006 IRRC corporate governance database and split it into three time periods: pre–SOX (1998–2000), post–SOX (2002–2004), and long–SOX (2006). We find that while there were some notable changes in the states' addition of opt-in and opt-out options for some of these laws, there were no significant changes in the way these laws were applied between the pre-SOX and post-SOX periods. Additionally, we discover that SOX had no significant further effect on either the laws themselves or their opt-in and opt-out clauses beyond 2004. Our findings suggest that states granted the companies extra latitude regarding some takeover defense clauses shortly after the SOX legislation went into effect.

Copyright© 2025 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

How to cite:

Kaya, H.D., & Engkuchik, E.N.S. (2025). Sarbanes-Oxley and the evolution of state takeover laws: A study of opt-in and opt-out provisions over time. Journal of Applied Economic Sciences, Volume XX, Spring, 1(87), 7–20. https://doi.org/10.57017/jaes.v20.1(87).01

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