Topic: Heaven is High and the Emperor is Far Away: Information Asymmetry and Organizational Implementation of State Policies
Speaker: Xiaoyu Zhou, School of Entrepreneurship andManagement，Shanghai Tech University
Time: Wednesday, 24 April, 13:30-15:00
Location: Room 217, Guanghua Building 2
In this study, we develop a theory of how information asymmetry undermines state government’s capacity to influence organizations’ behaviors. The availability of local information is a key for the state government to monitor organizational implementation of national policies. When the distance to the state government is farther, organizations are more likely to escape from the state’s monitoring, and this distance-(un)implementation link is more pronounced with higher costs of gathering local information. We test our theory in the context of Chinese publicly listed firms’ environmental activities between 2008 and 2014 when the state government issued a series of policies on environmental protection in its 12th and 13th Five-Year Plans. Our results show that firms are less likely to respond to the demands of state government on environmental protection when they are located in regions that are geographically distant to China’s capital city Beijing, as there’s more information asymmetry between the state government and the regions. This distance effect is attenuated in regions with better road transportation, more Weibo postings on environmental protection, and foreign consulates, as these factors either ease the communication between the state government and local community, or constitute alternative sources for state leaders to acquire local information. Our study contributes to the Weberian state literature and the research on state capacity, and it provides an information-based explanation for corporate environmentalism in a major transitional economy.
Keywords: Information Asymmetry, State Capacity, Organizational Policy Implementation, Corporate Green Actions
Xiaoyu Zhou, Assistant Professor at School of Entrepreneurship and Management, Shanghai Tech University. He earned his doctoral degree in Marketing from the Guanghua School of Management, Peking University. His current research interests focus on the audience evaluation, organizational categories, and corporate social responsibility, and relevant works have been accepted at theAcademy of Management Journal, Journal of Business Ethics, World Development,and etc.
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