Disclosure Regulation and Competitive Interactions: Evidence from the Oil and Gas Industry

• 成果类型: Article
• 署名作者: Badia, Marc; Duro, Miguel; Jorgensen, Bjorn N.; Ormazabal, Gaizka
• 署名单位: University of Navarra; IESE Business School; Copenhagen Business School; Hanken School of Economics; University of Navarra; IESE Business School; Centre for Economic Policy Research - UK; European Corporate Governance Institute
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0436
• 发表日期: 2021
• 页码: 1-29
• 关键词: INTRAINDUSTRY INFORMATION TRANSFERS; sfas no. 131; Private Firms; earnings; management; PROPRIETARY; announcements; investments; environment; contagion

摘要

We study the effects of mandatory disclosure on competitive interactions in the setting of oil and gas (O&G) reserve disclosures by North American public firms. We document that reserve disclosures inform competitors: when one firm announces larger increases in O&G reserves, competitors experience lower announcement returns and higher real investments. To sharpen identification, we analyze several sources of cross-sectional variation in these patterns, the degree of competition, and the sign and the source of reserves changes. We also exploit two plausibly exogenous shocks: the tightening of the O&G reserve disclosure rules and the introduction of fracking technology. Additional tests more directly focused on the presence of proprietary costs confirm that the mandated reserve disclosures result in a relative loss of competitive edge for announcing firms. Our collective evidence highlights important trade-offs in the market-wide effects of disclosure regulation.