Disclosure Regulation and Competitive Interactions: Evidence from the Oil and Gas Industry

Marc Badia, Miguel Duro, Bjørn N. Jørgensen, Gaizka Ormazabal

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We study the effects of mandatory disclosure on competitive interactions in the setting of oil & 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.
TidsskriftThe Accounting Review
Udgave nummer5
Sider (fra-til)1-29
Antal sider29
StatusUdgivet - sep. 2021

Bibliografisk note

Published online: October 12 2020.


  • Proprietary costs
  • Competition
  • Disclosure rules
  • Disclosure of oil and gas reserves
  • Informational spillovers
  • Real externalities of disclosure regulation