Management Accounting Section Midyear Meeting

Workplace Harassment Risk, Non-Disclosure Agreements, and Information Flow

• In Event: ESG Issues

Abstract

We study how anti-harassment laws impact information flow within firms. We show an improvement in internal information flow after the passage of laws that limit the use of non-disclosure agreements (NDAs) related to workplace harassment, consistent with the prediction that anti-NDA reduces harassment-risk-related friction in social interactions. The effect of anti-NDA is stronger for individuals with high harassment risk exposure and for firms with high reliance on private communications for information. In contrast, the effects of anti-NDAs are muted in regions with stronger prevailing conflicting social norms. Moreover, we find that, on average, firm value increases after the passage of anti-NDAs.

Authors

• Menghan Zhu, Vrije Universiteit Amsterdam

• Xiang Zheng, NHH Norwegian School of Economics

• Yuping Jia, Frankfurt School of Finance