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How Firms Respond to Mandatory Information Disclosure

53 Pages Posted: 6 Jul 2011 Last revised: 28 Jun 2012

Anil R Doshi

University College London - School of Management

Glen Dowell

Cornell University - Johnson Graduate School of Management

Michael W. Toffel

Harvard Business School

Date Written: June 22, 2012

Abstract

Mandatory information disclosure regulations seek to create institutional pressure to spur performance improvement. By examining how organizational characteristics moderate establishments’ responses to a prominent environmental information disclosure program, we provide among the first empirical evidence characterizing heterogeneous responses by those mandated to disclose information. We find particularly rapid improvement among establishments located close to their headquarters and among establishments with proximate siblings, especially when the proximate siblings are in the same industry. Large establishments improve more slowly than small establishments in sparse regions, but both groups improve similarly in dense regions, suggesting that density mitigates the power of large establishments to resist institutional pressures. Finally, privately held firms’ establishments outperform those owned by public firms. We highlight implications for institutional theory, managers, and policymakers.

Keywords: information disclosure, institutional theory, environmental strategy, mandatory disclosure, environmental performance

Suggested Citation

Doshi, Anil R and Dowell, Glen and Toffel, Michael W., How Firms Respond to Mandatory Information Disclosure (June 22, 2012). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 12-001. Available at SSRN: https://ssrn.com/abstract=1879248 or http://dx.doi.org/10.2139/ssrn.1879248

Anil Rajnikant Doshi

University College London - School of Management ( email )

Level 38
1 Canada Square
London, E14 5AA
United Kingdom

HOME PAGE: http://mgmt.ucl.ac.uk/

Glen Dowell

Cornell University - Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

Michael W. Toffel (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States
617.384.8043 (Phone)

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