Our research demonstrates that prices and trading are very sensitive to rules and rule changes. In other words, subtle institutional choices can have real economic consequences. In the following sections, we describe relevant institutions and related research. Next, we present our hypotheses, data, empirical model, and results. The last section presents conclusions.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 gave the U.S. Securities and Exchange Commission (SEC) the authority to adopt a proxy access rule. Though the legislation urged an exemption for companies with less than $75 million in market capitalization, the SEC unexpectedly failed to provide a permanent exemption from the rule for those companies. This paper finds that, for the roughly 900 publicly traded companies studied with under $75 million in market capitalization, the proxy access rule caused on the order of $335 million in shareholder losses.
This working paper is a foundational piece that presents a comprehensive accounting of all known local, state, and federal excise taxes, a brief history and chronology of each, and their respective “values” relative to total tax revenues.