Political connection, political promotion and corporate environmental information disclosure in China

Abstract

PurposeThis study aims to examine how the political career concerns of top executives affect corporate environmental practices.Design/methodology/approachBased on rent-seeking theory, this work uses empirical analysis to investigate the impact of top executives’ political connection and political promotion on corporate environmental information disclosure (EID). Data were collected from Chinese listed firms in heavily polluting industries in the Shanghai Stock Market in 2014–2016.FindingsThe results reveal that the highly politically connected top executives are more likely to be promoted in their political positions than their counterparts. However, the firms under the management of these highly politically connected executives show low level of EID. The results suggest that the political motivations of top executives with political connection hinders corporate EID.Originality/valueThis paper extends literature system about the impact of executives' rent-seeking on corporate EID by examining the informal mechanisms in terms of political connection and political promotion. It provides insights for studies of corporate environmental strategies and governmental environmental responsibility.