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The Informational Effects of Tightening Oil and Gas Disclosure Rules

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  • Ormazabal, Gaizka
  • Badia, Marc
  • Duro, Miguel
  • Jorgensen, Bjorn N.

Abstract

We exploit two regulatory shocks to examine the informational effects of tightening pre-existing mandatory disclosure rules. Canadian Rule NI 51-101 and the US “Modernization of Oil and Gas Reporting†introduced a quasi-identical tightening of the rules governing oil and gas reserve disclosures in Canada and the US at different times. Both in Canada and the US, we document significant changes in firms’ reporting outcomes when the new regulation is introduced. We also find that the reserve disclosures filed under the new regulations are more closely associated with stock price changes and with decreases in bid-ask spreads. Our findings are robust to controlling for other confounding factors such as time trends, other information disclosed simultaneously, financial reporting incentives, mispricing and monitoring efforts.

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  • Ormazabal, Gaizka & Badia, Marc & Duro, Miguel & Jorgensen, Bjorn N., 2018. "The Informational Effects of Tightening Oil and Gas Disclosure Rules," CEPR Discussion Papers 12776, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12776
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    Cited by:

    1. Ormazabal, Gaizka & Badia, Marc & Duro, Miguel & Jorgensen, Bjorn N., 2017. "Market-wide Effects of Off-Balance Sheet Disclosures:," CEPR Discussion Papers 12152, C.E.P.R. Discussion Papers.
    2. Marc Badia & Miguel Duro & Bjorn N. Jorgensen & Gaizka Ormazabal & Hans B. Christensen, 2020. "The Informational Effects of Tightening Oil and Gas Disclosure Rules," Contemporary Accounting Research, John Wiley & Sons, vol. 37(3), pages 1720-1755, September.

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    More about this item

    Keywords

    Disclosure rules; Disclosure of oil; Gas reserves;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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