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How Firms Respond to Mandatory Information Disclosure

Author

Listed:
  • Anil R. Doshi

    () (Harvard Business School)

  • Glen W.S. Dowell

    () (Johnson School of Management, Cornell University)

  • Michael W. Toffel

    () (Harvard Business School, Technology and Operations Management Unit)

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.

Suggested Citation

  • Anil R. Doshi & Glen W.S. Dowell & Michael W. Toffel, 2011. "How Firms Respond to Mandatory Information Disclosure," Harvard Business School Working Papers 12-001, Harvard Business School, revised Jun 2012.
  • Handle: RePEc:hbs:wpaper:12-001
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    References listed on IDEAS

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    Cited by:

    1. Xiaoyang Li & Yue M. Zhou, 2016. "Offshoring Production while Offshoring Pollution?," Working Papers 16-09, Center for Economic Studies, U.S. Census Bureau.
    2. Christopher Marquis & Michael W. Toffel & Yanhua Zhou, 2011. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," Harvard Business School Working Papers 11-115, Harvard Business School, revised Jul 2015.
    3. Jonathan T. Kolstad, 2013. "Information and Quality When Motivation Is Intrinsic: Evidence from Surgeon Report Cards," American Economic Review, American Economic Association, vol. 103(7), pages 2875-2910, December.
    4. Jonathan T. Kolstad, 2013. "Information and Quality when Motivation is Intrinsic: Evidence from Surgeon Report Cards," NBER Working Papers 18804, National Bureau of Economic Research, Inc.
    5. Baron, David P. & Harjoto, Maretno A. & Jo, Hoje, 2008. "The Economics and Politics of Corporate Social Performance," Research Papers 1993, Stanford University, Graduate School of Business.
    6. Simcoe, Timothy & Toffel, Michael W., 2014. "Government green procurement spillovers: Evidence from municipal building policies in California," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 411-434.
    7. Adler Miserendino, Rebecca & Bergquist, Bridget A. & Adler, Sara E. & Guimarães, Jean Remy Davée & Lees, Peter S.J. & Niquen, Wilmer & Velasquez-López, P. Colon & Veiga, Marcello M., 2013. "Challenges to measuring, monitoring, and addressing the cumulative impacts of artisanal and small-scale gold mining in Ecuador," Resources Policy, Elsevier, vol. 38(4), pages 713-722.
    8. Markus Kitzmueller, 2008. "Economics and Corporate Social Responsibility," Economics Working Papers ECO2008/37, European University Institute.
    9. Laura Spira & Michael Page, 2010. "Regulation by disclosure: the case of internal control," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 14(4), pages 409-433, November.

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    Keywords

    information disclosure; institutional theory; environmental strategy; mandatory disclosure; environmental performance.;

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