Regulatory policy

The Buffering Effect of Brands for Companies Facing Legislative Homogenization

How do corporations—who balance making sales today and planning for the future—respond to regulatory change? Thomaz, Bargeron, Hulland, and Zutter’s study provides evidence that legislative changes, such as Sarbanes-Oxley, can significantly affect a corporation’s priorities. The passage of Sarbanes-Oxley incentivized U.S. corporations to focus more on reaping the immediate gains from marketing rather than investment in research and development.