Essays on the incentives to manage public float

Chapter 1 examines a previously undocumented action that firms take to manage public float. The SEC uses a bright line public float threshold to differentiate among different reporting and disclosure requirements based on firm size. This motivates some firms to manage public float around the threshold to reduce compliance cost. Depending on whether the regulations favor small or large firms, firms underreport or overreport public float by counting more or fewer shares as "affiliated." I find that some non-accelerated filers underreport public float to delay Section 404 and reduce audit fees. I also find that some firms overreport public float to register on the cost efficient Form S-3.;Chapter 2 provides evidence about the unintended consequences arising when small companies are exempted from costly regulations, Section 404 of the Sarbanes-Oxley Act, in particular. Some small firms have incentives to stay small, by undertaking less investment, making more cash payouts to shareholders, reducing the number of shares held by non-affiliates, making more bad news disclosures and reporting lower earnings than control firms. Finally, there is no evidence that firms remaining small are doing so to maintain insiders' private control benefits. These findings have implications beyond SOX because numerous federal and state regulations exempt small firms via bright line size thresholds.