Supply Chain Sustainability: Evidence on Conflict Minerals
Paul A. Griffin
University of California, Davis - Graduate School of Management
David H. Lont
University of Otago - Department of Accountancy and Finance
Boston University - Questrom School of Business
August 11, 2013
Pacific Accounting Review DOI: 10.1108/PAR-04-2013-0023
This study tests hypotheses about the expected economic cost of section 1502 of the Dodd-Frank Reform Act of 2010. We find that shareholder value decreases for companies with conflict minerals disclosures (discloser companies) for up to three weeks following the event dates of the discloser companies. Shareholder value also decreases, but to a lesser degree, for a control sample of non-discloser companies expected to disclose in the future. We estimate an aggregate loss of shareholder value for these companies of $6.5 to $13.1 billion. These results have implications for corporate social justice, for they show that legislators’ and stakeholders’ demands for increased social transparency can be costly to shareholders when the disclosure rules induce changes in management and customer decision making.
Keywords: Supply chain sustainability, Conflict minerals, Dodd-Frank Reform Act, Section 1502, Off-balance sheet assets and liabilities
JEL Classification: G14, M41, M48, K22, Q51, Q56
Date posted: August 17, 2012 ; Last revised: May 15, 2014
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