Government-business Relationship Research Articles

Transaction-based government-business relationship via government customer

Transaction-based government-business relationship (GBR) can be established when the government serves as a company's customer. This study investigates the consequences and mechanisms of this type of GBR. We find that companies with government customers receive more subsidies, due to both signalling effect and rent-seeking effect. As China's anti-corruption campaign tries to disconnect relation-based GBR and eliminate rent-seeking, transaction-based GBR survives. In the post anti-corruption campaign period, the rent-seeking effect of the transaction-based GBR weakens, but the signalling effect remains, and the government subsidy efficiency improves. This study sheds lights on the economics of transaction-based GBR which is largely ignored in the existing literature and reveals the effects of the interactions of anti-corruption and business transactions.

The Key Role of the Chamber of Commerce in Supporting the High-quality Development of the Private Economy

The chamber of commerce is a powerful support to serving the government and managing the non-public economy, which can strongly promote the high-quality development of the private economy in Shaanxi. In recent years, Shaanxi has made multiple overall plans and taken multiple measures to improve the vitality of the development of the chamber of commerce in an all-around way, enabling the high-quality development of the private economy with policy integration and innovation. However, there are still problems in the development of chambers of commerce, such as a lack of public service awareness, lack of institutional norms, uneven levels of development, and lack of unified centralized management. Therefore, this paper puts forward four countermeasures and suggestions. First, clarify the boundary of power and responsibility, and effectively exert the function of the federation of industry and commerce. Second, strengthen the legal guarantee and support of norms and policies. The third is to improve the level of autonomy of chambers of commerce and enhance the development in all aspects. Fourth, build a new type of government-business relationship and continuously improve the market business environment.

Business and Politics in Urban Indonesia: Patrimonialism, Oligarchy and the State in Two Towns

Studies of the Indonesian political economy suggest a transformation of government-business relationship from a “patrimonial administrative” state, in which bureaucrats are dominant, to a “patrimonial oligarchic” state dominated by business actors. We examine this proposition by analysing government-business relationship in two towns: a town in Sulawesi, dominated by trade, and a town with a strong industrial base in Java. In the first, politics still approximates that of a patrimonial administrative state with a weak business sector and a dominant bureaucracy. In the second, a local business dynasty has come to power, but without promoting regularisation of state-business relationship. Despite the differences, patronage politics are similarly dominant in both locations, which we illustrate by zeroing in on the construction sector and the distribution of infrastructure projects. We conclude by discussing the implications of our findings for the nature of urban politics in Indonesia, underscoring the significance of patronage across a range of settings.

The new government–business relationship and corporate philanthropy: An analysis based on political motivation

The new government–business relationship and corporate philanthropy: An analysis based on political motivation

The impact of ESG responsibility performance on corporate resilience

Against the backdrop of an increasingly complex and uncertain external corporate environment, how to quickly adjust and recover from external risk shocks and challenges by improving corporate environmental, social, and governance (ESG) responsibility performance has become key to achieving sustainable growth for companies today. Although emerging concepts, such as ESG and corporate resilience have received widespread societal attention, exactly how ESG responsibility performance can enhance development resilience has yet to be sufficiently explained. To this end, this paper explores the mechanisms and characteristics of corporate ESG responsibility performance on corporate resilience, using a sample of 4527 A-share listed companies selected for the ESG rating by China Securities from 2009 to 2021. The study finds that: Firstly, the better the ESG responsibility performance, the more resilient the companies; each unit increase in ESG rating increases the economic value added (EVA) rate of total assets by 0.63% and reduces the risk of corporate bankruptcy by 0.32%, thus increasing corporate resilience. In addition, all three ESG sub-indicators contribute to the improvement of corporate resilience, with corporate governance rating having a more significant impact on corporate resilience. Secondly, the mechanism analysis shows that the level of the investor interaction, intensity of strategy investment, and quality of the government–business relationship play a moderating role in the process of ESG responsibility performance affecting corporate resilience. Thirdly, certain heterogeneous characteristics of ESG responsibility performance affect corporate resilience. Fourthly, there is a lag in the impact of ESG responsibility performance on corporate resilience, with the impact largely disappearing after a four-period lag.

Can Managers' Short-Sightedness Be Reversed Through Close and Clean Business-government Relationships?

This research uses a sample of Chinese listed firms from 2017 to 2020 to empirically evaluate, based on institutional theory, the influence of close and clean government-business relationships on managers' shortsighted conduct. Close and clean government-business relationship can effectively inhibit managers' short-sighted behavior, and both close government-business relationship and clean government-business relationship can effectively inhibit managers' short-sighted behavior. Government services are mostly employed in the closeness aspect to encourage managers to create long-term goals, and in the cleanness aspect to restrain managers' opportunistic behavior through government integrity and transparency. Managers' shortsighted behavior is inhibited by close and clean government-business relationships, and this effect is especially pronounced in state-owned firms where institutional investors own a significant number of the shares.

How Does Low-Carbon Financial Policy Affect Corporate Green Innovation?—Re-Examination of Institutional Characteristics, Influence Mechanisms, and Local Government Behavior

This paper employs a propensity score matching approach to construct a control group and estimate the impact of the CETS pilot policy, a low-carbon financial policy, on corporate green innovation and its impact mechanism in a difference-in-difference manner. The results show that the CETS pilot policy has a significantly positive effect on corporate green innovation. The higher the penalty degree and the carbon price, the more obvious the promotion of the green innovation of pilot enterprises. The mechanism test shows that the improvement of corporate green innovation is mainly due to the incentive effect rather than the anti-driving effect of the CETS pilot policy, that is, the policy promotes corporate green innovation by providing innovation resources and enhancing the willingness to innovate. Further analysis shows that only in regions where local governments have less competitive pressure can the CETS pilot policy effectively promote enterprise innovation resources and that a close and clean government–business relationship can help strengthen the promotion effect of the CETS pilot policy on the willingness of enterprises to innovate. Furthermore, this paper introduces its theoretical framework as a strategic tripod to explore the friction in the process of the CETS pilot policy affecting corporate green innovation from the perspective of the industry environment and corporate resources. This research shows that a lack of industry green technology and corporate human capital may hinder the positive impact of the CETS pilot policy on corporate green innovation. Finally, this study found that the CETS pilot policy has no significant impact on the quality of corporate green innovation, and the lack of industry green technology and corporate human capital may hinder the CETS pilot policy from improving the quality of corporate green innovation.

Analyzing the effect of public private partnership mode on sewage treatment in China

The public–private partnership (PPP) mode is one of the main ways to promote environmental governance through marketization in the sewage treatment industry. This mode is crucial for environmental protection and livelihood improvement. In order to investigate the impact of PPP mode on sewage treatment, the influence of financial development and the government–business relationship on the effectiveness of sewage treatment under PPP mode, and the role of government in this context, an empirical model is established. To achieve this, data from 284 prefecture-level and above cities in China from 2009 to 2017 has been selected as research samples. The total amount of regional sewage treatment PPP projects is used as the proxy variable for participation in the PPP mode. The findings reveal that the PPP mode of sewage treatment effectively reduces the intensity and amount of sewage discharge. Moreover, the results indicate that a higher level of financial development and a more perfect financial system are associated with better sewage treatment effects under the PPP mode. Similarly, a more harmonious government–business relationship and a higher health index of this relationship correspond to improved sewage treatment effects under the PPP mode. The government should actively enhance government transparency, formulate appropriate corporate taxes and fees, clarify the responsibilities and obligations of the government and enterprises, and optimize the business environment in order to optimize the sewage treatment effect of the PPP mode.

The “Close” and “Unsullied” New Government-Business Relationship and Entrepreneurial Orientation: Empirical Research from Listed Firms in China

The “Close” and “Unsullied” New Government-Business Relationship and Entrepreneurial Orientation: Empirical Research from Listed Firms in China

Game-theoretic approach to understanding status transition dynamics and employee performance enhancement in organizations

To foster high-quality economic development, it is critical to not only enhance the “hard environment,” such as infrastructure, but also to make significant strides in the “soft environment,” such as the relationship between government and businesses. This study posits that the government, industry associations, and enterprises should collectively participate in fostering a “cordial and clean” government-business relationship. By resolving the equilibrium solution of the three-party game, it has been identified that achieving the goal of constructing a cordial and clean government-business relationship and aligning with the ambitions of enterprises necessitates policy guidance and a balance of interests among the government, industry associations, and enterprises. The research also contributes to the beneficial exploration of game theory, by constructing a network model from the perspective of public management and integrating it with the practice of local administrative reform. This integration is particularly relevant for industry associations, and their systematic analysis further enhances the practical applicability of the research.

Government–business relationship and strategic transformation of enterprises: Evidence from China

This research uses data from private firms listed on China's A-share market (2016–2020), investigating the positive impact of strong regional government-business relations on firms' strategic transformations. Results indicate a positive correlation between healthier government-business relationships. Path testing reveals that the relationship primarily enhance the level of strategic transformation in private enterprises by reducing financing constraints within enterprises. This effect is stronger in areas with higher marketization levels and where management has significant shareholding. The study enriches understanding of the economic benefits of healthy government-business relations and offers empirical insights for enhancing strategic transformations in private enterprises.

Do Central Inspections of Environmental Protection Affect the Efficiency of the Green Economy? Evidence from China’s Yangtze River Delta

As an important part of China’s ecological civilization, the impact of the Central Inspections of Environmental Protection (CIEP) on the development of a green economy has been widely recognized. This article uses the first round of the Central Inspections of Environmental Protection (CIEP) and the “look-back” in cities above the prefecture level in China’s Yangtze River Delta as a quasi-natural experiment to construct more scientific green economic efficiency indicators based on OH (2010), and employs a multi-period spatial DID (difference-in-differences) model to empirically investigate the impact of the CIEP on the urban green economic efficiency. This study confirms that: (1) The Central Inspections of Environmental Protection have a significant contribution to the green economic efficiency of cities, and the “look-back” is of great significance to the long-term green development of cities. (2) The Central Inspections of Environmental Protection have had a positive impact on the building of a pro-clear government–business relationship in coastal and riverine areas, promoting the application of green technology research and development, and, thus, improving the green economic efficiency of cities. (3) Under the constraints of the central environmental protection inspection system, the southern Jiangsu region has been effective in promoting the green transformation of enterprises to enhance the efficiency of the city’s green economy due to its location endowment and historical tradition of opening ports and trading in the late Qing Dynasty. (4) Under the pressure of environmental regulation, some enterprises chose to relocate their production to non-inspected areas, which had a negative spillover effect on the green economic efficiency of the cities they moved into. Policy Implications: The impact of central environmental inspections on the efficiency of urban green economies varies from time to time and place to place, and it is important to regulate the use of administrative resources and strengthen inter-provincial coordination to promote synergy and cooperation across provincial environmental inspection systems. This paper provides ideas for understanding the logical starting point for the implementation of the central environmental inspection system, and for better promoting the green transformation and high-quality development of regional economies based on national characteristics.

The Enabling Effect of Intellectual Property Strategy on Total Factor Productivity of Enterprises: Evidence from China’s Intellectual Property Model Cities

Does intellectual property (IP) strategy improve the total factor productivity of enterprises (TFP)? This paper uses 21,930 enterprise-year observations of China’s A-share listed enterprises from 2010–2020, adopts a multi-period difference-in-differences model, and constructs a quasi-natural experiment on the impacts of intellectual property model cities (IPMC) on TFP. The findings are as follows: (1) IPMC significantly improves TFP. (2) It has lag effects and long-term effects. (3) The promotion effect is stronger for state-owned enterprises and enterprises implementing organizational political strategies. (4) The close government-business relationship and clean government-business relationship play positive regulating roles in IPMC on TFP. (5) IPMC promotes TFP by increasing urban fiscal expenditure on science and technology and enterprise technological innovation. This study enriches the theory and evidence of policy effect assessment for IPMC at the enterprise level, and provides policy inspiration for the promotion of IPMC and TFP, to help China achieve high-quality economic development.

Embedded symbiosis: an institutional approach to government-business relationships in the Chinese internet industry

ABSTRACT Studies on the Chinese internet mostly focus on how the government censors content and regulate digital platforms. We rarely know how internet companies understand, respond to and negotiate the relationship with the government. This study examines Danlan, the company that runs the world’s largest gay dating app Blued. We approach the interaction between Danlan and the government with an institutional perspective, treating them both as organizations seeking resources and legitimacy. Drawing on fieldwork, we develop the concept of embedded symbiosis, which characterizes the collaborative government-business relationship, and explore how Danlan, the seemingly weak side in this relationship, plays an active role in initiating, negotiating, and maintaining such relations at different stages of embeddedness. Danlan endeavors to form a symbiosis with the government to pursue its survival and development, yet eventually risks alienating from the gay community and colluding with the state in governing homosexuality. The case of Danlan shows the possibility for internet companies to seek legitimacy in an ever-changing political environment through working closely with the authorities and even becoming part of the governmental system itself.

Can intellectual property protection promote trade credit financing of high-tech enterprises: evidence from the Chinese ‘three-in-one trial’ reform

Whether the intellectual property protection (IPP) system can improve the financing environment for enterprise innovation is a poorly studied research issue. Taking the Chinese ‘three-in-one trial’ reform of intellectual property rights (IPRs) as a quasi-natural experiment; we investigate the impact of strengthening IPP on trade credit financing of high-tech enterprises. The results show that strengthening IPP can promote their trade credit by about 2%, and the technology market effect, innovation effect and information effect are the underlying mechanisms. Further tests indicate that the promotion effects of IPP are more obvious on high-tech enterprises with lower government support, lower proportion of fixed assets and healthier government–business relationship. Different from the previous literature, which focuses on the relationship between IPP and innovation activities or benefits, this article expands the literature by investigating its impact on innovation financing and fills the research gap of the impact of IPP on capital market information searching.

Environmental policy uncertainty and corporate green innovation: evidence from China

PurposePrevious studies have mostly discussed the impact of environmental policy on enterprise innovation, but the discussion on how turbulence in environmental policy may affect firms' green innovation has been insufficient. This paper explores the effect of environmental policy uncertainty on corporate green innovation in the turnover of environmental protection officials (EPOT) context.Design/methodology/approachThe authors manually collected the data on the EPOT of 280 Chinese prefecture-level cities, and used the Poisson regression model to conduct empirical analyses based on the panel data of 1472 Chinese listed manufacturing firms from 2008 to 2017.FindingsThe results show that environmental policy uncertainty leads firms to reduce their green patent applications only for green invention patent applications. Such an effect is more pronounced in non-state-owned enterprises (non-SOEs). In addition, when the new directors of the Ecology and Environmental Bureau take office through promotions or are no more than 55 years old, the negative effect is more obvious, but there is no significant difference regardless of whether new directors have worked in environmental protection departments.Originality/valueFirst, this paper supplements the research on the antecedents of corporate green innovation from the perspective of environmental policy uncertainty and extends the applications of real options theory. Second, this paper expands the research on the government–business relationship from the EPOT perspective.

Bridging ‘Home’ Political and Economic Rationalities with ‘Host’ Demands and Constraints: The Case of Regional Chinese State‐owned Multinational Corporations

AbstractRegional state‐owned multinational corporations (SOMNCs) are a major constituent of the ‘going out’ strategy of the Chinese state. Although SOMNCs are nominally infused with political rationalities, they also have explicit contractual economic targets. We therefore explore the underlying rationalities of regional SOMNCs and the roles of expatriate managers in relation to their international expansion strategies. We mobilize Foucault's conception of ‘governmentality’ in providing a holistic understanding of the case of a regional SOMNC (and its subsidiary in Ghana), notably how its managers rationalize their decisions in terms of reconciling political vision with local contexts, tackling domestic competition via foreign market exploration, mobilizing local engagement, improving expatriate managers’ morale, and reinterpreting an interdependent government–business relationship. Our study suggests that coexisting economic and political considerations between the regional government and SOMNCs are instrumentalized with a view to ‘governmentalizing’ overseas operations via business strategies and localization management practices in the Ghanaian subsidiary. In such an interdependent relationship, political appeals and market imperatives are mutually beneficial and complementary, with expatriate managers skilfully using their affiliation with their government. Our theoretical contribution lies in adapting a governmentality driven framework to forge an alliance between liberal forms of management and non‐liberal forms of governing and control.

The government-business relationship and eco-innovation: evidence from chinese automobile industry

Abstract This study used 2017-2019 Chinese A-share-listed automobile manufacturing companies as research samples to analyse the impact of the government-business relationship on eco-innovation. We found that a healthy government-business relationship had a positive impact on enterprise eco-innovation. The mediating effects test verified that a healthy government-business relationship affected enterprise eco-innovation through financing constraints. In addition, managerial ownership significantly increased the positive impact of a healthy government-business relationship on enterprise eco-innovation. We also found that a healthy government-business relationship had a more substantial impact on enterprise eco-innovation in non-state-owned enterprises when considering corporate property rights. The study results provide empirical evidence for the influence of the government-business relationship on enterprise eco-innovation and deepen our understanding of eco-innovation in China’s automobile manufacturing industry.

Participation in Poverty Governance, Market Competition and Corporate Innovation: Based on Listed Companies’ Participation in Targeted Poverty Alleviation

The construction of the national governance system and the improvement of governance capability are the cornerstone for promoting stable social and economic development, which profoundly change the corporate external operating environment and then have an effect on the reform of internal corporate governance. Innovation is the inexhaustible driving force to enhance the core competitiveness of enterprises and prosper the market economy. So what effect will the corporate participation in external governance have on corporate innovation? Meanwhile, the government and the market give full play to the role of resource allocation in the process of corporate participation in governance. So is market competition an incentive for enterprises to innovate in the participation of social governance? Does the participation in governance affect corporate innovation only at the stage of innovation input?Based on the above problems and the background of listed companies’ participation in poverty alleviation, this paper explores the influence of participation in governance on corporate innovation from the two levels of macro governance and micro governance, the two perspectives of government and market, and the two dimensions of input and output, by using A-share listed companies in Shanghai and Shenzhen from 2016 to 2019 as the research sample. The empirical evidence suggests that enterprises which participate in governance will have “the pressure of governance” and generate the crowding-out effect of innovation investment to a certain extent from the perspective of investment. In other words, the poverty alleviation behavior of listed companies is significantly correlated with the intensity of innovation investment. However, greater market competition can significantly reduce the crowding-out effect and promote the incentive effect of innovation which functions as fundamental momentum. From the perspective of output, the result proves that the participation in poverty alleviation will promote the quantity and quality of corporate innovation output, as well as the efficiency of corporate innovation. The analysis of the heterogeneity of credit resources and government-business relationship shows that enterprises with harder access to credit resources and worse government-business relationship have a stronger crowding-out effect. Meanwhile, the study shows that the crowding-out effect will be significantly promoted as policy burdens increase and performance pressure of management decreases. The analysis of economic consequences finds that although the participation of enterprises in poverty governance squeezes their innovation input, it increases their innovation output, and the quantity and quality of corporate innovation output are improved. In other words, it contributes to the improvement of the innovation efficiency of enterprises.This paper is helpful to understand the innovation of enterprise entity further. It also provides some new ideas to straighten out the relationship between the government and the market as well as stimulate the innovation vitality of enterprises, which has academic significance and practical value in some degree.

“The right to the post-Soviet city”: Analysing communication gaps in the public space

The paper investigates the communication gaps in the public spaces of post-Soviet cities (from the perspective of business-government-society interaction) through the spatial paradigm lens of urban sociology coupled with the perspective of communications studies. The author analyzes the particularities of the spatial organization of post-Soviet cities; describes the main features of their urban public space; and examines their impact on the patterns of social interactions. The paper presents the results of empirical research into the government-business relationship, using the case of Minsk, the capital city of Belarus. The author specifically focuses on the instances of communicative dysfunction (i.e. communication gaps) as the manifestation of social distance, exploring its nature from the perspective of the concept of “a Stranger”. The findings point at a need to supplement the local communities with local public communication channels and content.