Voluntary, Self-Regulatory and Mandatory Disclosure of Oil and Gas Company Payments to Foreign Governments
Paul M. Healy
Harvard Business School; National Bureau of Economic Research (NBER)
Harvard University - Harvard Business School
July 1, 2015
Transparency advocates argue that disclosure of oil and gas company payments to host governments for natural resources is a public good, helping to reduce corruption and increase accountability in resource rich countries. Yet we find a very low frequency of voluntary disclosures of payments to host governments by oil and gas firms, and negative stock price reactions for affected firms at the announcement of regulations mandating disclosure. This suggests that sample firm managers and their investors perceive that there are private costs of such voluntary disclosures, contributing to continued low transparency and weak governance in resource rich countries. However, we document that industry self-regulation has generated information to substitute for the gap in voluntary company disclosure. We also find some evidence that these disclosures are accompanied by lower country corruption ratings, suggesting that collective action may be an effective way for the industry to manage the private costs of disclosure and respond to public pressure to improve governance in resource rich countries.
Number of Pages in PDF File: 45
Keywords: oil and gas, transparency, disclosure, corruption, competition, self regulation, regulation
JEL Classification: M14, M21, M40
Date posted: November 19, 2011 ; Last revised: October 29, 2015
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