Do higher value firms voluntarily disclose more information? Evidence from China

Chen, Jean; Cheng, Xinsheng; Gong, Stephen; Yue-jin, Tan

doi:10.1016/j.bar.2013.06.003

Cited by 27 publications

(17 citation statements)

References 61 publications

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“…Chinese companies depend, to varying degrees, on guanxi in their value creation processes, and thus dependence on guanxi may affect the corporate disclosure decision. J. J. Chen et al (2014) find that high guanxi-dependence firms (e.g., non-high-tech firms and firms headquartered in low-marketization regions) refrain from informative voluntary disclosures for fear of revealing sensitive information that may harm their guanxi.…”

Section: Resultsmentioning

confidence: 95%

“…Despite the fact that China has become one of the largest economies in the world and is unique on many dimensions and may not easily fit into the existing Western economic theories (Ke, Rui, & Yu, 2012), there is a dearth of research on factors influencing corporate voluntary disclosures in China. A distinctive feature of business reality in China is a high level of dependence on guanxi, especially guanxi with key resource allocators such as government officials (J. J. Chen et al, 2014).…”

Section: Literature Review Institutional Background and Hypothesismentioning

confidence: 99%

“…As such, firms backed by political patrons are reluctant to disclose large amounts of (useful) information for fear of exposing their guanxi and inviting public scrutiny or regulatory investigation. 5 Using China data during 2007-2010, J. J. Chen et al (2014) find a negative relation between firm value and voluntary disclosure for firms that rely heavily on guanxi; by contrast, for firms that rely less heavily on guanxi and more on other core competencies, they find a positive relation between firm value and voluntary disclosure.…”

Section: Literature Review Institutional Background and Hypothesismentioning

confidence: 99%

“…Chen, Lee, & Li, 2008; Firth, Rui, & Wu, 2011). To access scarce resources, companies have to cultivate good guanxi (personal relationships or connections) with key government officials (J. J. Chen, Cheng, Gong, & Tan, 2014).…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Implications of Political Patronage and Political Costs for Corporate Disclosure

Chen

Cheng

Gong

et al. 2016

Journal of Accounting, Auditing & Finance

Self Cite

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We take advantage of China's relationship-based institutional setting to investigate whether and how firms' disclosure decision is affected by political patronage and associated political costs considerations. Using a sample of 65 firms involved in the Shanghai Pension corruption scandal of 2006, we find that relative to benchmark firms, the connected firms are associated with lower levels of disclosure prior to the scandal. However, they significantly increased their disclosures in the year immediately following the public exposure of the scandal. A content analysis indicates that the increased disclosures are value-relevant, and are not merely used as a public relations effort to subdue public outcry in the immediate aftermath of the scandal. Cross-sectional analyses further reveal that the increase in disclosure is positively associated with the extent of firm's guanxi dependence and type/severity of involvement in the scandal. We conclude that the increased disclosures are in response to the heightened risk and potential costs of regulatory and public scrutiny in the wake of a major event involving high political and public sensitivity. The evidence is supportive of the political costs hypothesis, and has important managerial and policy implications.

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Section: Resultsmentioning

confidence: 95%

Section: Literature Review Institutional Background and Hypothesismentioning

confidence: 99%

Section: Literature Review Institutional Background and Hypothesismentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Implications of Political Patronage and Political Costs for Corporate Disclosure

Chen

Cheng

Gong

et al. 2016

Journal of Accounting, Auditing & Finance

Self Cite

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“…Many studies have documented that corporate governance mechanisms can affect the firm's information disclosure through ownership, board mechanisms, audit committee quality, governor independence, and so on [40][41][42][43]. Besides, guanxi plays a moderating role on the relation between firm value and EID, because guanxi includes relationships with government agencies and bureaucrats [44,45]. State-owned firms are bound to take more responsibility for environmental protection because of their ownership.…”

Section: Mechanism Of Eid's Influencing Firm Valuementioning

confidence: 99%

The Impact of Environmental Information Disclosure on the Firm Value of Listed Manufacturing Firms: Evidence from China

Yang

Wen

2020

IJERPH

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In the last decade, the public concern over environmental problems has led to the emergence of environmental regulations in firms’ information disclosure on environmental practice, especially in some developing countries such as China. Based on a panel dataset composed of the listed manufacturing firms in China during 2006–2016, this paper uses the difference-in-differences (DID) model and the propensity score matching (PSM) method to investigate whether the Environmental Information Disclosure Measure (for Trial Implementation; EIDMT) affects the firm value. The results show that EIDMT exerts a significant impact on the listed manufacturing firms’ value. In consideration of the firm’s ownership, EIDMT plays a more important role in the firm value of non-state-owned firms than state-owned firms. Furthermore, using a PSM–DID model for eastern, central, and western China, we find that EIDMT significantly affects the firm value in eastern and western China but has little impact on central China.

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The certification effect of government R&D subsidies on innovative entrepreneurial firms’ access to bank finance: evidence from China

Chen

Gao

et al. 2018

Small Bus Econ

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Do higher value firms voluntarily disclose more information? Evidence from China

Cited by 27 publications

References 61 publications

Implications of Political Patronage and Political Costs for Corporate Disclosure

Implications of Political Patronage and Political Costs for Corporate Disclosure

The Impact of Environmental Information Disclosure on the Firm Value of Listed Manufacturing Firms: Evidence from China

The certification effect of government R&D subsidies on innovative entrepreneurial firms’ access to bank finance: evidence from China

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