Corporate Public Transparency on Financial Performance: The Moderating Role of Political Embeddedness

Abstract

Corporate public transparency (CPT) is instrumental for companies to establish communications and trust with the public by disclosing and communicating information concerning corporate environmental and social impacts. However, it is still in dispute whether CPT can help promote corporate financial performance (CFP). This paper studied the moderating role of political embeddedness on the relationship between CPT and CFP. We investigate multiple hypotheses about the moderating roles of the political embeddedness including bureaucratic embeddedness (political connections of a chief executive officer (CEO) who was/is a government official or member of political council) and ownership embeddedness (i.e., state-owned enterprises (SOEs)). With the data of 195 observations from top 200 Chinese enterprises ranked by revenue for the years 2014~2016, the results show the following: (1) the relationship of CPT on CFP is moderated by government official and SOE ownership; (2) a negative moderating effect of government official; and (3) a negative moderating effect of SOE ownership. The research implications are further discussed. The findings of this study have practical implications for investors, stakeholders, and regulators.

Towards Holistic Governance of China’s E-Waste Recycling: Evolution of Networked Policies

“…Producers and enterprises in China need to pay attention to China’s policy progress and governance philosophy so as to respond to governmental intentions to achieve sustainable legitimacy and preferential treatment from the government [ 45 ]. With the support of network analysis and quantitative text analysis, some hidden valuable information can be mined from publicly published policy documents, contributing to corporate strategic management and decision making.…”

Empirical Analysis on Corporate Transparency, Competitive Advantage, and Performance: An Insight of Muscat Securities Market

“…Al-Ahdal, Alsamhi, Tabash, and Farhan (2020) analyzed the effect of corporate governance mechanisms on the financial version of GCC and Indian listed firms and confirmed that board accountability (BA) and audit committee (AC) has a trivial impact on organizational performance, as measured by Tobin's Q and ROE, while transparency and disclosure (TD) harm organizational performance, as measured by Tobin's Q. Li, Miao, Zheng, and Tang (2019) investigated the link between overall transparency and corporate performance, and they posited a negative relationship between general transparency and the implementation of companies. Using census data of 2018, they proved that this relationship is due to increased transparency decreasing the performance of companies in general.…”

“…Similarly, transparency and disclosure (TD) have a minor negative impact on firms' performance as measured by Tobin's Q. Li, Miao, Zheng, and Tang (2019) reported a negative relationship between general transparency and company performance as per data from the 2018 census, the reason being that with increasing clarity, the company performance decreases (generally). Thus, Zarahazalose and Moneva (2017) posited that transparency and company performance is positively correlated, where transparency helps a company.…”

Printed Flexible Heaters‐Based Thermotherapy Platform for Multiduty Thermal Management

“…Among them, paper is considered to be a promising substrate for manufacturing environmentally friendly FHs due to its eco‐sustainability, renewability as well as low price. [ 20 ]…”