Do Firms Experiencing More Wildfires Disclose More Wildfire Information in their 10-Ks?

Wildfires pose a significant risk that threatens firm value and this risk has increased in recent years with the record-breaking wildfires in the United States and elsewhere. In this seminar, Professor Griffin reported on tests of whether such increasing wildfire risk has affected firms’ disclosures of wildfire-related information. Matching the location of wildfires in the United States over the period 1996 to 2018 to firms with headquarters in the same county as the wildfire resulted in a sample of 86,185 firm-year observations for the tests.

The results obtained show that, on average, firms experiencing more wildfire days in a year disclose more wildfire information in their annual 10-K filings and that the disclosure by wildfire-exposed firms has increased significantly in recent years.