Disclosure regulation and competitive interactions: Evidence from the oil and gas industry

0Citations
Citations of this article
20Readers
Mendeley users who have this article in their library.
Get full text

Abstract

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.

Cite

CITATION STYLE

APA

Badia, M., Duro, M., Jorgensen, B. N., & Ormazabal, G. (2021). Disclosure regulation and competitive interactions: Evidence from the oil and gas industry. Accounting Review, 96(5), 1–29. https://doi.org/10.2308/TAR-2018-0436

Register to see more suggestions

Mendeley helps you to discover research relevant for your work.

Already have an account?

Save time finding and organizing research with Mendeley

Sign up for free