What motivates a firm to disclose information rather than remain silent following a material, negative economic event? For example, why did oil companies issue multiple, detailed disclosures about oil spills caused by Hurricane Katrina and Hurricane Rita but not disclose information about oil spills of similar or even larger sizes caused by equipment failures and human error?
Our recent study, “Tip of the Iceberg? The Level of Blame and Disclosure Propensity,” examines whether firms are less likely to disclose information regarding material, negative economic events for which they are likely to be blamed. We define a “blamed event” as a … Read more