But a new study by the Rand Corp. found that while Sarbanes-Oxley had an effect on small business, at least one aspect was short-lived. The report found that the propensity for small public companies to be purchased by private firms increased by 53 percent during the first year. The estimate was calculated relative to similar foreign companies, which are also not subject to Sarbanes-Oxley. And this effect was found only in firms smaller than approximately $20 million in market capitalization. What's more, the effect was not found in firms of any size after five quarters.

As study coauthor Eric Talley, a Rand economist and law professor, explains it, "Either it is a sign that Sarbanes-Oxley created a burden on entrepreneurship, inefficiently forcing companies out of public capital markets, or, alternatively, it provided some protection to investors by inducing smaller firms that should never have been public to begin with to abandon that status." Either way, he concludes, the new scrutiny introduced by Sarbanes-Oxley likely induced poorly adapted firms to go private immediately after passage.