Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcast
  • Managing the Future of Work Podcast
  • About Us
  • Book
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Podcasts
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    What Impedes Oil and Gas Companies’ Transparency?
    06 Dec 2011Working Paper Summaries

    What Impedes Oil and Gas Companies’ Transparency?

    by Paul Healy, Venkat Kuppuswamy and George Serafeim
    Oil and gas companies face asset expropriations and corruption by foreign governments in many of the countries where they operate. In addition, most of these companies operate in multiple host countries. What determines their disclosure of business activities and hence transparency? Paul Healy, Venkat Kuppuswamy, and George Serafeim examine three forms of disclosure costs that oil and gas managers could potentially consider. Both the US government and the European Union are currently considering laws that would require oil and gas companies to disclose information about operations in host countries. Key concepts include:
    • Competitive risks are an important factor underlying differences in oil and gas firms' disclosure ratings across the host countries in which they operate.
    • Requiring disclosure of payments to foreign governments is unlikely to increase proprietary costs for oil and gas companies.
    • Mandating disclosures about the performance of oil and gas companies in host countries, however, is likely to increase proprietary costs, particularly risk of expropriations and costs related to product market competition.
    • Companies that are coming from more corrupt home countries tend to be less transparent about their payments to host country governments.
    LinkedIn
    Email

    Author Abstract

    We examine determinants of oil and gas companies' transparency in reporting on business activities in host countries where they operate. We find that our index of transparency across host countries is lower the more corrupt the host country, the higher the number of nationalizations in that host country in the past, and the fewer the number of oil and gas companies operating in the host country. The results of additional tests are consistent with the risk of expropriation being a barrier to information disclosure about firm performance. In contrast, we find no evidence that disclosure of government payments is related to proprietary costs. Moreover, holding the host country constant we find that firms coming from more corrupt home countries are less transparent about their government payment.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: November 2011
    • HBS Working Paper Number: 12-038
    • Faculty Unit(s): Accounting and Management
      Trending
        • 31 Jan 2023
        • Research & Ideas

        It’s Not All About Pay: College Grads Want Jobs That ‘Change the World’

        • 25 Jan 2022
        • Research & Ideas

        More Proof That Money Can Buy Happiness (or a Life with Less Stress)

        • 17 Jan 2023
        • In Practice

        8 Trends to Watch in 2023

        • 25 Feb 2019
        • Research & Ideas

        How Gender Stereotypes Kill a Woman’s Self-Confidence

        • 17 May 2017
        • Research & Ideas

        Minorities Who 'Whiten' Job Resumes Get More Interviews

    Paul M. Healy
    Paul M. Healy
    James R. Williston Professor of Business Administration
    Senior Associate Dean for Faculty Development and Research
    Contact
    Send an email
    → More Articles
    George Serafeim
    George Serafeim
    Charles M. Williams Professor of Business Administration
    Contact
    Send an email
    → More Articles
    Find Related Articles
    • Accounting
    • Governance
    • Energy
    • Utilities
    • North & Central America
    • United States

    Sign up for our weekly newsletter

    Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    ǁ
    Campus Map
    Harvard Business School Working Knowledge
    Baker Library | Bloomberg Center
    Soldiers Field
    Boston, MA 02163
    Email: Editor-in-Chief
    →Map & Directions
    →More Contact Information
    • Make a Gift
    • Site Map
    • Jobs
    • Harvard University
    • Trademarks
    • Policies
    • Accessibility
    • Digital Accessibility
    Copyright © President & Fellows of Harvard College