Posted: 17 Aug 2012 Last revised: 15 May 2014
Date Written: August 11, 2013
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
Suggested Citation: Suggested Citation
Griffin, Paul A. and Lont, David H. and Sun, Estelle, Supply Chain Sustainability: Evidence on Conflict Minerals (August 11, 2013). Pacific Accounting Review DOI: 10.1108/PAR-04-2013-0023. Available at SSRN: https://ssrn.com/abstract=2129371 or http://dx.doi.org/10.2139/ssrn.2129371