IACMR Research Seminar Series Session #3
Title：Heaven is High and the Emperor is Far Away: Information Asymmetry, State Inattention, and Firm Implementation of State Environmental Policy (with Xiyi Yang and Xiaoyu Zhou)
Time: 9:00- 10:15 am (China time)
Date: August 26, 2020
Registration link: https://www.xcdsystem.com/iacmr/forms/index.cfm?ID=d6TM1Af
In this study, we examine how geographic distance enables firms to mitigate the regulatory pressure from the state government. Drawing from information economics and attention-based view, we propose that a farther geographic distance reduces the state’s influence on firms potentially due to two mechanisms: information asymmetry and the state leaders’ inattention to distant organizations. Using data on Chinese public firms’ implementation of environmental activities between 2008 and 2016, we find that firms conduct significantly fewer environmental activities relevant to the state’s Five-Year Plans when they are geographically distant to the state government in Beijing. While there is some evidence that this distance effect is more pronounced in regions with a higher level of firm performance heterogeneity, we found that internet activism and the presence of natural reserves, which raise the state’s attention to local environmental conditions, more significantly reduce the distance effect. Taken together, our regression analysis suggests that the inattention mechanism plays a more dominating role in driving the distance effect.
Introduction of the Speaker
Heli Wang is Janice Bellace Professor of Strategic Management at Singapore Management University. She received a Ph.D. in Strategic Management from the Ohio State University. Prior to joining SMU in 2012, she was an assistant and then associate professor at Hong Kong University of Science and Technology. Her research focuses on the resource-based view of the firm, strategic human capital, stakeholder management, and corporate social responsibility. She has previously served as a consulting editor of Management Organization Review and an associate editor of Academy of Management Journal. She is currently serving as an associate editor of Academy of Management Review.