The Deregulation of Private Capital and the Decline of the Public Company

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2017-04-29

Posted by Elisabeth de Fontenay, Duke University School of Law, on Thursday, April 27, 2017
Editor's Note: Elisabeth de Fontenay is an Associate Professor at Duke University School of Law. This post is based on a recent article authored by Professor de Fontenay.

Despite attracting little notice until recently, the proportion of companies choosing to go public in the U.S. has been plummeting for more than two decades. Why is this happening? Most observers blame public companies’ increasing regulatory costs—particularly disclosure costs. Yet rising costs cannot be the full story, given that the downward trend began well before Sarbanes-Oxley, the supposed game-changer for public-company regulation. In a recent article, The Deregulation of Private Capital and the Decline of the Public Company, I argue that the culprit need not be rising costs of corporate disclosure, but declining benefits.

(more…)