Corporate Structure and Regulatory Risk in the Oil & Gas Industry
Whether or not a publicly traded corporation's individual oil and well facility had committed an environmental violation from 2010 to 2015, was examined against measures of financial liquidity constraints for its corporate owners, namely the ratio of capital expenditures to total assets, and free cash flow to total assets, through a logistic regression. Its purpose was to identify whether or not extra cash might lead to oil and well facilities acting against shareholders best interests by committing environmental violations in the context of agency theory. It was found that when corporations ...
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