I don't think this is necessarily a question of whether regulation as such is good or bad. It seems intuitively plausible to me that regulation like SOX can be both beneficial in terms of trust in the markets and a deterrent for smaller companies to go public.
While I agree, I think the problem here is that many, many things are intuitively plausible. Maybe market fraud is increased and the markets are less safe for small businesses, or maybe policies or custom or collusion have cemented big players who have less interest in small companies. We need data and reason to sort the wheat from the chaff.
Our intuitions suck. If they were good, we would have had the right physics in 1,000 BCE instead of 1900 CE. (Not my line, but a good one.)
I'd guess earlier than 1900, but I don't know. And of course, there are many gray areas.
Wake me up when people stop believing in homeopathy.
I don't envy economists. No double-blind lab trials here. Even if we had Putnams Twin Earth our experiments would probably fail for some weird semantic reason :)
Do you mean, larger than staying private? Or larger than it used to be? Regarding either, I would guess that regulatory costs were much higher in the 1970s, before modern 'deregulation' and when the concept of government involvement in the economy was different, yet small companies' participation in the market was much higher then, according to the article:
* In 1975, 61.5 percent of publicly traded firms had assets worth less than $100 million, using inflation-adjusted 2015 dollars. But by 2015, that proportion had dropped to only 22.6 percent.
Also, are you aware of any evidence for it? (For other readers, the parent's link addresses another issue, the change in cost of small trades.) Unfortunately, regulation and its costs are such a politicized issue that I have a hard time finding reliable data (or any data).
EDIT: For a counterpoint, consider that regulation makes markets more attractive. For example, nobody would want to participate in a completely unregulated market, where theft and fraud were commonplace. Regulation, when implemented properly, makes markets safe for participants, protecting their investments.