This paper studies whether and how mandatory nonfinancial disclosure affects firms' real decisions. I exploit a disclosure regulation enacted in California, which mandates that firms disclose how they conduct due diligence to address their suppliers' human rights abuses. I find that treated firms increase their supply chain due diligence, and their suppliers' human rights performance improves following the regulation. The effects are stronger when firms face greater pressure from non-governmental organizations (NGOs) and socially conscious shareholders, when customers have greater incentives to use the newly disclosed information, and when the regulation leads to a larger increase in information comparability. Collectively, the results suggest that mandatory nonfinancial disclosure can affect firms' real decisions through market mechanisms and that stakeholder responses play a key role. Data Availability: Data are available from the public sources cited in the text.

We examine whether mandatory tax information exchange agreements between governments have real effects on firms’ physical trade in tangible goods. We posit that some of the physical trade in tangible goods flowing through low-tax jurisdictions is intended to facilitate income shifting. As such, shocks to enforcement via mandatory information exchange agreements could cause firms to change the physical flow of goods. Using firm-level shipping container data, we find that adoption of bilateral tax information exchange agreements (TIEAs) between the U.S. and foreign jurisdictions is associated with significant decreases in the volume of imports by U.S. firms from those jurisdictions. We also find reallocation effects: U.S. firms increase imports from jurisdictions in the same subregion as the treated jurisdiction, resulting in minimal overall change in total imports. To our knowledge, ours is the first study to document a connection among enforcement-related tax disclosure, income shifting, and physical trade flows. Data Availability: The data used in this study are available from the sources cited in the paper.

We study how vertical integration shapes firms’ public disclosures. Theory suggests that firms can use public disclosure to coordinate with supply chain partners and predicts a substitution between vertical integration and public disclosure of future strategic plans, since the internalization of production reduces the need to publicly coordinate. Using data on the extent of vertical integration, we find that firms that become more vertically integrated reduce their public disclosures about their product strategies and that the reduction is most pronounced for vertically integrated firms with greater internalization of production and those with the largest informational and strategic frictions along the supply chain.