Internalizing Externalities through Public Pressure: Transparency Regulation for Fracking, Drilling Activity and Water Quality

Bonetti, Pietro; Leuz, Christian; Michelon, G.

doi:10.3386/w30842

Cited by 5 publications

(1 citation statement)

References 64 publications

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“…Alternatively, the new disclosure rule can affect the equilibrium via different mechanisms. First, customers with longer payment durations could suffer negative publicity and reputational damage when their payment practices become publicly available; companies may therefore alter their payment behaviors in response to public pressure (or the threat of it) (e.g., Dyreng, Hoopes, and Wilde [2015], Bonetti, Leuz, and Michelon [2023]), and suppliers, anticipating faster repayment, could extend more trade credit. Regulators explicitly stated that they anticipated behavioral change from PPDR due to public shaming, suppliers’ usage of reports, and responsible companies leading the way and encouraging best‐in‐class payment practices (BEIS [2018]).…”

Section: Introductionmentioning

confidence: 99%

Payment Practices Transparency and Customer‐Supplier Dynamics

GREWAL,

MOHAN,

PÉREZ‐CAVAZOS

2024

J of Accounting Research

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We exploit the introduction of the Payment Practices Disclosure Regulation in the United Kingdom (UK) to examine the effects of mandating disclosure of customer‐supplier payment practices. We find that nondisclosing small and medium‐sized enterprises (SMEs) experience a reduction in their accounts receivable by 8.3%, consistent with an acceleration of their trade credit collections. Further, SMEs exhibit fewer financial constraints after the regulation. We survey managers from large firms and SMEs to understand the underlying mechanisms. The required disclosures raise large firms’ reputational concerns and shift the bargaining power between large firms and SMEs. Additionally, the new disclosures compel executives at large firms to scrutinize their own firms’ payment practices, leading to increased accountability and a stronger focus on timely payment among senior managers.

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Section: Introductionmentioning

confidence: 99%

Payment Practices Transparency and Customer‐Supplier Dynamics

GREWAL,

MOHAN,

PÉREZ‐CAVAZOS

2024

J of Accounting Research

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Fighting Climate Change through Shaming

Yadin

2023

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This Element contends that regulators can and should shame companies into climate-responsible behavior by publicizing information on corporate contribution to climate change. Drawing on theories of regulatory shaming and environmental disclosure, the Element introduces a "regulatory climate shaming" framework, which utilizes corporate reputational sensitivities and the willingness of stakeholders to hold firms accountable for their actions in the climate crisis context. The Element explores the developing landscape of climate shaming practices employed by governmental regulators in various jurisdictions via rankings, ratings, labeling, company reporting, lists, online databases, and other forms of information-sharing regarding corporate climate performance and compliance. Against the backdrop of insufficient climate law and regulation worldwide, the Element offers a rich normative and descriptive theory and viable policy directions for regulatory climate shaming, taking into account the promises and pitfalls of this nascent approach as well as insights gained from implementing regulatory shaming in other fields.

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