The cost of transparency : stock market reactions to the introduction of the extractive sector transparency measures act
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 return 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.
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