Effects Beyond Capital Markets: The Shift from “Prix Fixe” to “À la Carte” Securities Regulation.
Kevin Li, Associate Professor, Accounting
Kevin Ke Li, Vicki Wei Tang (2025); Effects Beyond Capital Markets: The Shift from “Prix Fixe” to “À La Carte” Securities Regulation. Journal of International Accounting Research (forthcoming); https://doi.org/10.2308/JIAR-
Abstract
Compared with “prix fixe” mandates, “à la carte” securities regulations enable local optimization and allow firms to reallocate corporate resources from public reporting to company building. Utilizing a rare retroactive application in securities regulation, we examine the real effects of a shift from a prix fixe to an à la carte regime. Upon the enactment of the Jumpstart Our Business Startups Act, retroactivated emerging growth companies (EGCs) report higher short-window returns than control firms. During the period when the à la carte regulation applies, retroactivated EGCs spend more on research and development (R&D) and create more jobs than control firms. Once the à la carte regime expires, EGCs reduce R&D spending and hiring. In the cross-section, retroactivated EGCs that more frequently elect to delay adopting new accounting standards exhibit greater positive real effects and higher enactment-window returns.