Effect of State Securities Laws on Small Business Capital Formation

摘要

The report develops methods for evaluating the effect of different state securities laws and regulatory systems on small business capital formation in the new issues securities market. It begins with a policy primer setting the federal/state legal framework of securities regulation and the balance of economic costs and benefits securities regulations imposed on emerging businesses. It develops methods for ranking blue sky laws, as written and as applied, by the economic costs they impose on capital formation. These stringency rankings are used in preliminary empirical analysis, regressions and correlations, to determine if greater stringency has the anticipated inverse relationship with small business capital formation. Limitations in the size of the available data set and consistency of state securities market data has precluded statistically significant empirical results.