What is it about?
This study investigate the different roles of the Chinese government in influencing companies’ decision making about corporate environmental reporting (CER) . 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 state-owned 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.
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Why is it important?
Unlike existing research that points to increasing government influence and normative pressures leading to more substantive reporting, this study finds that there are limits to these influences and pressures in the Chinese context, as firms are mainly engaging in CER due to the government’s incentivizing influence.
Perspectives
This study finds that the stakeholder power of the Chinese government is so strong that CER in China becomes a legitimacy tool for companies to demonstrate their adherence to the requirements of the government. I hope the finding would shed some light to the government's policy making in terms of CER. Chinese companies also need to consider CER more seriously in order to compete effectively.
Hui Situ
RMIT University
Read the Original
This page is a summary of: The Influence of the Government on Corporate Environmental Reporting in China: An Authoritarian Capitalism Perspective, Business & Society, July 2018, SAGE Publications,
DOI: 10.1177/0007650318789694.
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