Fracking Disclosure, Collateral Value, and the Mortgage Market

• 成果类型: Article
• 署名作者: Sinha, Kirti
• 署名单位: University of Texas System; University of Texas Dallas
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2020-0119
• 发表日期: 2022
• 页码: 427-454
• 关键词: LIQUIDATION VALUES; RISK-MANAGEMENT; business press; INFORMATION; CONSEQUENCES; POLICY; INVESTMENT; CONTRACTS; decisions; texas

摘要

This paper examines whether laws requiring oil and gas firms to disclose the chemicals used in their fracking operations affect the mortgage lending activity for properties located in nearby areas. I hypothesize and find that the disclosure mandate reduces uncertainty about the value of housing collateral and subsequently increases (1) the probability of obtaining a mortgage by 2.5 percentage points (pp), and (2) loan-to-value by 2.2 pp. My main analyses exploit the variation in the location of properties relative to fracking wells. Cross-sectional tests that exploit heterogeneity in drinking water sources and the content of firm disclosures further substantiate my inferences and mitigate endogeneity concerns. These findings suggest that disclosure regulation for oil and gas firms affects housing collateral values, thereby impacting the mortgage market.