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Article
Publication date: 18 May 2022

Shidi Dong, Lei Xu and Ron P. McIver

Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions’ (FIs…

1642

Abstract

Purpose

Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions’ (FIs) sustainability disclosures.

Design/methodology/approach

Using univariate statistical and multiple regression analyses, this study quantitatively examines the impacts of coercive pressure from the government and stock exchanges, imitation within subsectors and normative pressure from industry associations and regulators on the quality of China’s listed FIs’ sustainability disclosures. Assessment of the robustness of regression results uses panel random-effects and generalized methods of moments estimation.

Findings

Financial sector corporate social responsibility (CSR) disclosure quality did not increase dramatically following issue of the “Guiding Opinions on Establishing a Green Finance System.” However, a convergence in quality is found over time. State ownership concentration and state links to dominant shareholders negatively impact the quality of financial sector sustainability disclosures, whereas stock exchange index listing requirements and industry association reporting guidance have positive influences.

Research limitations/implications

First, data availability limits the sample to listed financial firms with RKS quality scores. Thus, results may not be generalizable to the broader listed and unlisted financial sector. Second, this study only examines the influence of external forces based on institutional theory. However, internal institutional forces, such as corporate governance, may require examination. This study’s results indicate that coercive pressure, as represented by issue of the “Green Finance” policy, has not yet prompted the financial sector to improve reporting quality; however, normative pressure has had significant influence in influencing FIs’ CSR practices, with China’s banks potentially taking a leading role.

Originality/value

The financial sector has a lower direct environmental impact than traditional polluting industries and different operating and reporting structures, features often used to argue for its exclusion in prior studies. However, its indirect environmental impact via lending and investing activities is significant, suggesting evidence on the determinants of sustainability disclosure quality is required. This study uses evidence from China’s financial sector to reduce this gap in the literature.

Details

Meditari Accountancy Research, vol. 31 no. 5
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 6 October 2020

Shidi Dong, Lei Xu and Ron McIver

This paper aims to provide a longitudinal analysis of influences on China’s financial sector’s sustainability reporting practices, examines “green finance” disclosures and…

2338

Abstract

Purpose

This paper aims to provide a longitudinal analysis of influences on China’s financial sector’s sustainability reporting practices, examines “green finance” disclosures and undertakes subsector comparisons. The state’s impact on the quantity and quality of reporting practices is analyzed.

Design/methodology/approach

Content analysis is used to examine the volumes, frequency and content of sustainability disclosures by China’s financial institutions. Survival analysis is used to identify factors significant in firms’ initiation of these disclosures. In total, 308 firm-year observations on disclosures are examined for 2007–2016.

Findings

China’s financial sector’s sustainability reporting pieces of evidence an “emerging stage” (2007–2009), “developing stage” (2010) and “greening stage” (2011–2016). The roles of institutional theory and regulatory pressure in explaining Chinese financial firms’ reporting behaviours are supported.

Research limitations/implications

This study has several limitations. Firstly, given data restrictions, use of a relatively small sample size. Secondly, it examines different categories of disclosures made by financial firms, not more detailed content. Thirdly, is the potential overlap in disclosure themes under the classification scheme.

Practical implications

China’s financial sector’s adoption of sustainability reporting has been institutionalized, mainly in its banking subsector, consistent with general regulatory pressures.

Social implications

“Greening the finance system” is examined in China’s context, as the country transforms from a resource and pollution-intensive to a green economy.

Originality/value

The financial sector is normally excluded from in-depth qualitative research. This study examines China’s financial sector’s responses to recent governmental pressures on green finance disclosures.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 2
Type: Research Article
ISSN: 2040-8021

Keywords

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Article
Publication date: 9 May 2016

Shidi Dong and Lei Xu

With its rapid economic expansion and its growing environmental and social issues, China has introduced explicit corporate social responsibility (CSR) regulations since 2006 as…

2210

Abstract

Purpose

With its rapid economic expansion and its growing environmental and social issues, China has introduced explicit corporate social responsibility (CSR) regulations since 2006 as part of its social harmony policy. The purpose of this paper is to examine the CSR disclosure practices of the historically unaccountable mining firms in China’s current regulatory context.

Design/methodology/approach

The sample covers all 60 listed mining firms on the Shanghai and Shenzhen Stock Exchanges between 2007 and 2012, totalling 360 firm-year observations. The authors adopt the “Chinese CSR Report Preparation Guide” as the benchmark for content analysis. To strengthen the analysis, the authors apply binary logistic regression with the determinants of state government, social responsibility index, and cross-listing overseas status.

Findings

The authors discover that mining firms rapidly adopt CSR disclosure in response to the regulatory pressures from the state government and the stock exchanges to maintain legitimacy and survival prospects. However, the quality of CSR disclosures becomes a new concern.

Research limitations/implications

The most environmentally and socially sensitive mining sector can provide good samples of firm CSR practice in the second largest economy. Although mandatory requirements may result in the firms’ passive compliance, strict regulation is still the key to the changes in corporate accountability and transparency. China may need to strengthen its CSR regulation for its sustainable growth in the coming Asian Era.

Practical implications

In the institutional context of China, the imposition of strict regulation seems to be the key to improving CSR practice. However, the mandatory requirements may also result in passive compliance without effective change in corporate accountability and transparency. The sustainable development of the mining sector and advocacy of CSR behaviour require cooperation at national, social and corporate levels.

Originality/value

This study contributes to the evolving CSR literature about China and the literature from an industry perspective where governance and regulation are highly influential. The methodology may also enrich future research in the area with a fairly long sample period.

Details

Journal of Applied Accounting Research, vol. 17 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

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Article
Publication date: 30 August 2023

Mahmoud Alghemary, Basil Al-Najjar and Nereida Polovina

The authors empirically investigate the association between acquisition, ownership structure and accrual earnings management (AEM) on real earnings management (REM) using Gulf…

295

Abstract

Purpose

The authors empirically investigate the association between acquisition, ownership structure and accrual earnings management (AEM) on real earnings management (REM) using Gulf Cooperation Council (GCC)-listed firms' context.

Design/methodology/approach

The authors' sample consists of 1,892 firm-year observations for the period from 2007–2017, and the authors adopt a panel data approach in investigating the interrelationships in this study. The authors employ different econometrics approach to test the authors' hypotheses.

Findings

The findings reveal that acquiring companies engage more in AEM if compared to REM. In terms of ownership structure, institutional ownership and state ownership mitigate the engagement in REM, whereas foreign ownership is found to be an ineffective mechanism in reducing engagement in REM. The authors report similar findings on ownership structure for AEM. The authors also find that the GCC firms engage more in REM when the firms engage in AEM, suggesting a complementary relation between these two earnings management techniques. These findings are robust after controlling for different aspects including any endogeneity issue in the authors' models.

Originality/value

The authors' research highlights the importance of understanding REM and AEM dynamics in GCC context. Also, the authors' findings on ownership structure suggest that GCC-listed firms can gain from institutional and state ownership which restricts earnings management, improving firm transparency and subsequently impacting firm performance.

Details

Journal of Accounting in Emerging Economies, vol. 14 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

Available. Open Access. Open Access
Article
Publication date: 29 July 2020

Lin Gui, Zhendong Yin and Huihua Nie

The stability maintenance system has played an essential role in maintaining social stability although it also has brought about social problems worthy of attention. Admittedly…

4328

Abstract

Purpose

The stability maintenance system has played an essential role in maintaining social stability although it also has brought about social problems worthy of attention. Admittedly compensation-based stability maintenance policy can address the appeals of citizens whose rights are infringed and the dissolving effect in the provision of compensation can save the cost of stability maintenance but such stability maintenance system lacks equilibrium.

Design/methodology/approach

The establishment of a strict assessment system for stability maintenance performance can encourage the stability maintenance authorities to eliminate the “fuse effect” as much as possible and ensure the effective implementation of the stability maintenance system. However, the rigorous stability maintenance performance assessment also provides the possibility for profit-driven petitions.

Findings

Due to the continuous accumulation of social dissatisfaction and the lack of stability maintenance equilibrium in the implementation of the compensation-based stability maintenance policy, public governance will fall into a stability maintenance paradox of “greater instability resulting from stability maintenance”.

Originality/value

The provision of sufficient means for the people to protect their interest by implementing measures such as strengthening the rule of law mechanisms is the key to achieve long-term social stability.

Details

China Political Economy, vol. 3 no. 1
Type: Research Article
ISSN: 2516-1652

Keywords

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