Political promotion incentives and within-firm pay gap: Evidence from China

Kong, Gaowen; Kong, Tony Dongmin; Lu, Ruichang

doi:10.1016/j.jaccpubpol.2020.106715

Cited by 54 publications

(12 citation statements)

References 30 publications

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“…Gaowen Kong et al. (2020) discovered that executives of state‐owned companies keep close contact with the government, so they pay more attention to their political future and obey the instructions of the superior government, which will make them take more political responsibilities than the interests of the company. However, for local company executives with limited political prospects, their chances of seeking political promotion are relatively small, so their motivations for choosing to undertake political responsibilities are relatively low (Cheng et al., 2017).…”

Section: Resultsmentioning

confidence: 99%

Stakeholders’ environmental preferences based corporate environmental information influencing factors research

2021

Environmental Quality Mgmt

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Attracted widespread attention from stakeholders, environmental information disclosed by companies can show the situations that corporates fulfill their environmental obligations. Different corporate stakeholders usually pay diverse attention to key environmental information factors due to their various industries, investment levels, identity characteristics, etc. However, the previous researches are not scientific enough due to the lack of reflecting the importance of environmental information according to the preferences of stakeholders. To fill this gap, this paper applies a fuzzy analysis model as the internal type‐2 trapezoidal fuzzy numbers —analytic hierarchy process (AHP) based ordinary least square regression to comprehensively reflect the preferences of stakeholders. Following that, this paper utilizes the data from 62 Chinese power companies as an example, and the results show that environmental information disclosed (EID) quality is positively correlated with regional economic development level and executive salary incentives. Moreover, the corporate political connection weakens the interaction between salary incentives and EID, which can be further confirmed by robustness analysis. Finally, this paper contributes to the literature on the research methods on EID by considering stakeholders’ preferences in the fuzzy environment.

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Section: Resultsmentioning

confidence: 99%

Stakeholders’ environmental preferences based corporate environmental information influencing factors research

2021

Environmental Quality Mgmt

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“…For instance, due to the limited availability of data, the panel data of this study merely include 6 years, which may to some extent soften the persuasiveness. In addition, political connections may be incorporated into the research framework to test the establishment of rent-seeking (Kong et al, 2020).…”

Section: Research Prospectsmentioning

confidence: 99%

“…As one representative nation of the centralized powers, the Chinese central government has a dominant role in environmental protection, where the top-down political promotion tournament system forced local cadres to focus on economic performance and infrastructure investment, while the governance of environmental pollution has been neglected in the past [5]. Fortunately, this situation began to change since the implementation of the 11th Five-Year Plan in 2006, with environmental performance incorporating to the promotion mechanism of local cadres [6]. In particular, "ecological civilization demonstration zones" (ECDZ), which are different from the prior economic zones, environmental protection zones, or free trade zones, become a breakthrough point [7,8].…”

Section: Introductionmentioning

confidence: 99%

Ecological Civilization Demonstration Zone, Air Pollution Reduction, and Political Promotion Tournament in China: Empirical Evidence from a Quasi-Natural Experiment

Wang

Geng

Jing-xue

et al. 2021

IJERPH

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Using the ecological civilization demonstration zone as a quasi-natural experiment, this study has explored the effect of it on air pollution in China by employing the difference-in-differences model and the spatial difference-in-differences model, and further tested the political promotion tournament in China by employing the binary logit model. The results show that the ecological civilization demonstration zone has basically and effectively reduced air pollution, except for carbon monoxide and ozone. In addition, the spatial spillover effects of the ecological civilization demonstration zone on air pollution are not only basically supported among the treated cities, but also extremely established in the untreated cities neighboring the treated cities. Furthermore, no clear evidence supports the establishment of the political promotion tournament in China, while local cadres tend to cope with the assessment of higher officials passively rather than actively. Overall, this study sheds light on the coordination of economic development and ecological civilization from the perspective of the career concerns of local cadres.

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“…As a result, the promotion of local officials no longer depends solely on the achievement of economic goals but also on the CSR performance of firms. Third, under China's authoritarian political system, politicians are strongly incentivized because official promotion is the only way for elite politicians to reach the upper echelons of the political hierarchy [18]. Meanwhile, given China's underdeveloped market system and extensive government intervention, local officials have strong incentives to mobilize firms in their jurisdiction to achieve their performance goals and secure promotions.…”

Section: Introductionmentioning

confidence: 99%

Do political incentives promote or inhibit corporate social responsibility? The role of local officials’ tenure

2023

PLoS ONE

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The existing literature on corporate social responsibility (CSR) drivers focuses on firm- and institution-level factors and rarely on the role of political incentives. Public officials control enormous resources in China, and their political incentives substantially shape certain firm behaviors. As CSR is one of the critical measures that the central government uses to evaluate the performance of local government, local officials have the incentive to channel firms into accomplishing their political goals. Correspondingly, local firms may strategically implement CSR to build a good relationship with local governments. This study investigates the impact of local officials’ political incentives (measured by tenure) on firms’ CSR. Using a panel of publicly listed Chinese firms covering 2009–2019, it documents a U-shaped effect of government officials’ tenure on the CSR performance of firms within their jurisdiction. To wit, the firm’s CSR decreases first and then increases with the growth of tenure. Moreover, this U-shaped effect will be strengthened in regions with a high priority of gross domestic product (GDP) growth and will be weakened in regions with good market development. In addition, there is no significant evidence that party officials’ tenure affects firms’ CSR. Overall, this study advances our understanding of the political determinants of CSR in emerging markets.

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Political promotion incentives and within-firm pay gap: Evidence from China

Cited by 54 publications

References 30 publications

Stakeholders’ environmental preferences based corporate environmental information influencing factors research

Stakeholders’ environmental preferences based corporate environmental information influencing factors research

Ecological Civilization Demonstration Zone, Air Pollution Reduction, and Political Promotion Tournament in China: Empirical Evidence from a Quasi-Natural Experiment

Do political incentives promote or inhibit corporate social responsibility? The role of local officials’ tenure

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