The cost of transparency: Stock market reactions to introduction of the Extractive Sector Transparency Measures Act in Canada

Abstract

This paper examines stock market reactions of affected firms to the introduction of the Extractive Sector Transparency Measures Act, ESTMA. Using publicly available stock returns data on Canadian listed mining firms and oil and gas producers, an event study is employed to assess how the stock market reacted to the key events in leading up to the enactment of the Act. ESTMA mandates extractive firms listed on Canadian stock exchange to disclose payments made to governments regarding exploration of oil, natural gas, and minerals. The evidence suggests no systematic negative impact on affected firms' stock returns surrounding the analysed events.

Keywords

Financial transparency; Mandatory disclosure requirements; Extractive sector transparency measures act

Published in

Resources Policy
2019, volume: 63, article number: 101463
Publisher: ELSEVIER SCI LTD

SLU Authors

• Marbuah, George

  • Department of Economics, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Economics

Publication identifier

• DOI: https://doi.org/10.1016/j.resourpol.2019.101463

Permanent link to this page (URI)

https://res.slu.se/id/publ/102282