Self-regulation is often proposed as a substitute for government regulation. We examine a setting in which a subset of firms voluntarily committed to transparency standards despite immediate competitive disadvantages, not merely to preempt regulation but to succeed under future mandatory rules they helped enact through lobbying. Focusing on the Extractive Industries Transparency Initiative (EITI), an anti-corruption multi-stakeholder initiative, we show that firms initially suffered competitive costs in corrupt markets after endorsing EITI. These firms subsequently lobbied for mandatory disclosure regulations. Once mandatory rules took effect, previously disadvantaged transparent firms gained substantial competitive advantages. Our study highlights how firms can integrate voluntary commitment with political advocacy to resolve collective action problems, reshaping both competitive dynamics and the regulatory landscape.

Balancing transparency with the protection of proprietary know‑how poses an acute “accountability–appropriability” dilemma for firms operating under intense public scrutiny. Focusing on chemical disclosure in the US hydraulic fracturing industry, I develop and test a framework that links public‐pressure shocks, market structure, and firms’ dual choices over (i) chemical toxicity and (ii) trade‑secret claims. The analysis links >5 million ingredient records from 170,000 wells (2010–2020) with well‑level productivity, cost, and permit data. Exploiting shale formations that straddle state borders, I compare wells drilled by the same operator/service firms in the same play‑year but exposed to different state‑year Fracking Concern Scores derived from local news.

Three findings emerge. (1) A one‑SD increase in public scrutiny reduces the probability a well uses any EPA‑listed or carcinogenic chemical by ≈ 10 % and cuts Toxic Release Inventory counts by ≈ 8 %, showing that pressure steers operators toward safer blends. (2) Whether the public also gains transparency hinges on market power: scrutiny suppresses trade‑secret claims in concentrated play‑years but elevates them in fragmented ones. (3) Productivity rises—not falls—under higher scrutiny; proprietary blends boost output, yet toxicity itself is uncorrelated with performance, indicating scope for “clean‑and‑competitive” reformulation.

The study extends disclosure theory to negative‐externality settings, demonstrates how competitive structure conditions non‑market responses, and reveals cospecialized assets and lead‑time strategies as a substitute for secrecy. For policymakers, effective transparency rules must temper imitation risk; for strategists, cleaner innovation need not sacrifice rents.