Disclosure Requirements´Effect on Stock Returns of U.S. Listed Natural Resource Extraction Issuers

Abstract

I examine the changes in firm value that oil, natural gas, and mining firms experience as a result of the implementation of the Cardin-Lugar Amendment into U.S. law. Using the traditional event study methodology I observe abnormal stock returns of U.S. listed extractive firms over five key events of the passage the regulation. The empirical evidence suggests that stock markets respond negatively to increased disclosure requirements for oil and gas producers, suggesting that the regulation harms the investors. In contrast the results suggest that the mining industry is in general unaffected by the Cardin-Lugar Amendment.