Effectiveness of the Extractive Industries Transparency Initiative

<p>I investigate two aspects of the Extractive Industries Transparency Initiative (EITI). The first issue is the effectiveness of the EITI in mitigating corruption in EITI implementing countries. The second issue is the economic value of extractive companies’ information disclosed under the EITI implementation regime. I address the first issue by examining the influence of EITI implementation experience on the perceived control of corruption in EITI implementing countries. Specifically, I address two questions (i) whether EITI implementation experience is associated with improved control of corruption for all implementing countries taken together, and (ii) whether the effect of EITI implementation experience on the perceived level of corruption varies across implementing countries. Based on the sampled 51 implementing countries over the period 2003-2015, I find that across-the-board, EITI implementation experience is not associated with improved control of corruption. The findings show that the interaction term for EITI implementation experience with Sub-Saharan African countries is positively associated with improved control of corruption. Thus, the negative effect associated with EITI implementation experience is less for Sub-Saharan African countries. I address the second issue by investigating the economic value of extractive companies’ exploration payments information disclosed under the EITI implementation process. Using the United States Extractive Industries Transparency Initiative (USEITI), I examine the impact of disclosure of non-tax payments by extractive companies to the US government, as an illustration of the economic value of information disclosed as a result of the EITI. I address two research questions (i) whether investors react to the initial disclosure of the USEITI information and hence whether the information is of value to investors, and (ii) the value relevance of this information over the whole period for which this information has been available. The issue employs two separate but related methods to examine these questions. First, it employs a standard event study methodology, to test for trading volume and price reaction, around the event date of the first-time release of this information. Second, it employs the Collins, Pincus, and Xie, (1999) adaptation of the Ohlson (1995) model to examine the value relevance of USEITI information disclosure over the period 2013-2016. The results show that the USEITI disclosure evoked both trading volume and price reactions, thus suggesting that the disclosure of extractive payments had information content relevant to price setting. The price reaction, as evidenced in the cross-sectional regression, is associated with oil and gas firms, and the working capital and asset turnover of the sample extractive companies. The results also indicate that the continuing disclosure of the USEITI information was value relevant. Taken together, the findings from the thesis suggest that the EITI has been relatively effective in lessening the level of perceived corruption in the countries in dire need of reform and more importantly, the information released under the EITI implementation regime has economic value both at initial release and subsequent continued release. Thus, policymakers and managers of companies operating in countries rich in natural resources need to take note of the impact of EITI implementation.</p>

Effectiveness of the Extractive Industries Transparency Initiative

<p>I investigate two aspects of the Extractive Industries Transparency Initiative (EITI). The first issue is the effectiveness of the EITI in mitigating corruption in EITI implementing countries. The second issue is the economic value of extractive companies’ information disclosed under the EITI implementation regime. I address the first issue by examining the influence of EITI implementation experience on the perceived control of corruption in EITI implementing countries. Specifically, I address two questions (i) whether EITI implementation experience is associated with improved control of corruption for all implementing countries taken together, and (ii) whether the effect of EITI implementation experience on the perceived level of corruption varies across implementing countries. Based on the sampled 51 implementing countries over the period 2003-2015, I find that across-the-board, EITI implementation experience is not associated with improved control of corruption. The findings show that the interaction term for EITI implementation experience with Sub-Saharan African countries is positively associated with improved control of corruption. Thus, the negative effect associated with EITI implementation experience is less for Sub-Saharan African countries. I address the second issue by investigating the economic value of extractive companies’ exploration payments information disclosed under the EITI implementation process. Using the United States Extractive Industries Transparency Initiative (USEITI), I examine the impact of disclosure of non-tax payments by extractive companies to the US government, as an illustration of the economic value of information disclosed as a result of the EITI. I address two research questions (i) whether investors react to the initial disclosure of the USEITI information and hence whether the information is of value to investors, and (ii) the value relevance of this information over the whole period for which this information has been available. The issue employs two separate but related methods to examine these questions. First, it employs a standard event study methodology, to test for trading volume and price reaction, around the event date of the first-time release of this information. Second, it employs the Collins, Pincus, and Xie, (1999) adaptation of the Ohlson (1995) model to examine the value relevance of USEITI information disclosure over the period 2013-2016. The results show that the USEITI disclosure evoked both trading volume and price reactions, thus suggesting that the disclosure of extractive payments had information content relevant to price setting. The price reaction, as evidenced in the cross-sectional regression, is associated with oil and gas firms, and the working capital and asset turnover of the sample extractive companies. The results also indicate that the continuing disclosure of the USEITI information was value relevant. Taken together, the findings from the thesis suggest that the EITI has been relatively effective in lessening the level of perceived corruption in the countries in dire need of reform and more importantly, the information released under the EITI implementation regime has economic value both at initial release and subsequent continued release. Thus, policymakers and managers of companies operating in countries rich in natural resources need to take note of the impact of EITI implementation.</p>

IS BITCOIN IMMUNE TO THE COVID-19 PANDEMIC?

This study examines how Bitcoin’s trading characteristics react to the COVID-19 pandemic, using detailed futures trading data from the Chicago Mercantile Exchange. The results show that volume-weighted Bitcoin futures return responds positively to the spikes of public interest. Meanwhile, the surges of pandemic information do not harm market quality. Volume, bid-ask spread, and trading frequency remain stable, indicating that the positive price reaction is not a result of a few small uninformed trades. Bitcoin's conditional beta on the S&P 500 index drops to near zero, while the conditional beta on gold more than doubles. These results indicate that traders have been using Bitcoin as a safe-haven asset after the pandemic outbreak.

Corporate Green Bond and Stock Price Reaction

The aim of this paper is to investigate the investors&rsquo; reaction to environmental actions taken by companies such as the issues of &ldquo;green bond&rdquo;. We conduct an event study around the announcement of green bond issuances for all publicly traded companies in the World in the period 2013-2019 (the largest period in literature on this field). Using CARs, we investigate the stock price behavior to green bond issues for 414 listed companies and we demonstrated significant stock price increases around the announcement date of first-time green bond issues. For second issues, the positive stock price reaction to eco-friendly initiatives decreases while it completely disappears for the subsequent issues. From the management perspective, green bond issue seems an eco-friendly action with decreasing marginal benefits, because after the first issue, the market is already aware about the firm&rsquo;s commitment to green projects.