The Influence of the Government on Corporate Environmental Reporting in China: An Authoritarian Capitalism Perspective

Abstract

This study uses panel data to investigate the different roles of the Chinese government in influencing companies' decision making about corporate environmental reporting (CER) via a two-stage process. The results show that the Chinese government appears to mainly influence the decision whether to disclose or not, but has limited influence on how much firms disclose. The results also show that the traditional model of authoritarian capitalism (under which stateowned enterprises [SOEs] are the major governance arrangement) is transforming into a new model. In the new model of authoritarian capitalism, the Chinese government uses newer, more sophisticated tools to manage both state-owned and non-state-owned companies. In addition, these new governance arrangements appear to be more efficient than the traditional model. The findings of this study have implications for both the Chinese government and for Chinese companies, as well as making important contributions to the literature and knowledge of CER in China.

Corporate social responsibility and accountability: a new theoretical foundation for regulating CSR

“…A vast literature has focused on the nature, role and the dynamics of corporate social responsibility. More recently, an emerging body of literature is examining the need for regulating CSR and the role of law (Abah, 2016;Amao, 2013;Buhmann, 2006;Buhmann, 2011;Dentchev, Haezendonck, & van Balen, 2017;Idemudia & Kwakyewah, 2018;Malesky & Taussig, 2017;Malesky & Taussig, 2019;Nieto, 2005;Okoye, 2016;Osuji, 2011;Osuji, 2015;Situ, Tilt, & Seet, 2018;Thirarungrueang, 2013). However, imposition of regulation on corporates for CSR faces several challenges in the absence of consensus on the nature of obligations that businesses have under current CSR models.…”

What Makes Authoritarian Capitalism Authoritarian? The Double Erosion of the Private-public Divide in Illiberal Hungary

“…From this perspective, any economic system where the state holds a significant stake of stock in companieseither as complete-, majority-, or minority shareholder (Musacchio et al, 2015) -qualifies as "state capitalism" (Kurlantzick, 2016). While important, it has been argued that the narrow focus on the state's ownership function should be broadened to account for other tools interventionist governments use to control economic actors (Situ et al, 2018). Secondly, some studies attempt to capture the specificities of state-dominated economies by applying the VoC approach (Dentchev, Haezendonck, & van Balen, 2017;Hofman et al, 2017;Witt & Redding, 2014).…”

“…Intriguingly, this useful typology is not leveraged to clarify the concept of "authoritarian capitalism" which has gained considerable traction in the literature (Witt & Redding, 2014;Situ et al, 2018;Hofman et al, 2017).Thus, Witt & Redding (2014: 15) characterise China's authoritarian capitalism as "a developmental state with distinct predatory admixtures;" without further explaining how the concepts of authoritarianism, developmentaland predatory state relate to each other.Similarly, Situ et al (2018: 4) suggest that the Chinese government uses at least three different means to influence companies to achieve its political goals: its influence as a shareholder; its influence as a regulator; and its influence through setting incentives for firms (Situ et al, 2018: 7). For Situ et al, (2018) authoritarian capitalism is a "form of state capitalism" (p.6), which is distinguished from other forms by the fact that the state "uses newer, more sophisticated tools to manage both state-owned and non-stateowned companies" (p.1), namely incentives and regulative influence. However, it is not obvious why these three mechanismsownership, regulation, incentivesshould qualify as "authoritarian" and how they differ from mechanisms commonly used in (state) capitalist countries (Musacchio et al, 2015;Kurlantzick 2016).…”

“…Conversely, attempts to apply the Varieties of Capitalism (VoC) (Hall & Soskice, 2001) approach to understand the "return of the state" as an economic actor in developing countries, have remained somewhat unconvincing (e.g. Hofman, Moon, & Wu, 2017;Situ, Tilt, & Seet, 2018), because this perspective exclusively focusses on the role of the state as a regulator, not an active player, which corresponds with the neoliberal regulatory state model that has emerged since the 1980s (Majone, 1994). Yet, even attempts to remedy this shortcoming by applying typologies of states drawn from the national governance and business systems literatures (Evans, 1995;Hollingsworth & Boyer, 1997;Whitley, 2007) have focused on broad-brush typologiesusually distinguishing regulatory-, welfare-, developmental-, and predatory states (Fainshmidt, Judge, Aguilera, & Smith, 2018;Witt et al, 2017)that do not do justice to the complexities of modern forms of state-dominated economies.…”

“…Furthermore, while the expansion of the political into the economic in the state capitalist case happens for reasons related to some notion of the "public interest," in the latter case a second erosion of the boundary between the public and the private takes place in that the state interest is increasingly identified with the private interests of the governing elite group. This conceptualization of state-and authoritarian capitalism suggests that it is key to go beyond classifying systems as "authoritarian" simply based on the "tools" of state interventionsuch as regulation, incentives, and ownership (Situ et al, 2018). Rather, we propose to investigate these "tools" as mechanisms in Bunge's (2004) sense, whose nature allows us to distinguish between authoritarian and non-authoritarian statedominated systems.…”