The Real Effects of Mandated Information on Social Responsibility in Financial Reports: Evidence from Mine-Safety Records

We examine the real effects of mandatory disclosures on social responsibility, which require SEC-registered mine owners to include their mine-safety records in their financial reports. These safety records are already publicly available elsewhere, which allows us to examine the incremental effects of including information in financial reports. Comparing mines owned by SEC-registered issuers to mines that are not, we document that including safety records in financial reports decreases mining-related citations and injuries by 11% and 13%, respectively, and reduces labor productivity by approximately 0.9%. Additional evidence suggests that the inclusion in financial reports, rather than unobservable factors associated with regulatory intervention, drives these effects. We also provide evidence that feedback effects from equity markets are a mechanism through which the dissemination of information through financial reports leads to real effects. Overall, our results illustrate that including information on social responsibility in financial reports can have economically significant real effects—even if that information is also disclosed elsewhere.