This table examines the change in firm productivity and the output elasticities of labor and capital in the post-SOX period using stochastic frontier estimation method. The analyses in this table are the same as in Table III except that we use MLE instead of OLS in estimating the model. To compare the change in technical efficiency of firms reporting an improvement in their internal control systems versus those without such a reported improvement, we regress the estimated change in technical efficiency, computed as the difference between average technical efficiency in the post-SOX period and that in the pre-SOX period, on a dummy variable, Improve, that takes on a value of 1 if the firm reported an improvement in its internal control system per requirement of SOX (i.e. from an ineffective internal control to an effective one) and 0 otherwise. We estimate the model by MLE;

Significant at the 1% level; ** significant at the 5% level;

significant at the 10% level