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Channeling and dampening: The role of political ties in information disclosure and concealment

Non-profit organizations (NPOs) help the state achieve its social objectives. At the same time, they often depend on the private-sector actors for donations. The different beliefs of public- and private-sector actors regarding which practices are desirable for NPOs can affect the transparency of the...

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Detalles Bibliográficos
Autores principales: Zheng, Weiting, Ni, Na, Crilly, Donal
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10381070/
https://www.ncbi.nlm.nih.gov/pubmed/37506088
http://dx.doi.org/10.1371/journal.pone.0289016
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author Zheng, Weiting
Ni, Na
Crilly, Donal
author_facet Zheng, Weiting
Ni, Na
Crilly, Donal
author_sort Zheng, Weiting
collection PubMed
description Non-profit organizations (NPOs) help the state achieve its social objectives. At the same time, they often depend on the private-sector actors for donations. The different beliefs of public- and private-sector actors regarding which practices are desirable for NPOs can affect the transparency of these organizations. We propose that political ties influence NPOs to comply with state-mandated disclosure requirements, while simultaneously dampening their willingness to voluntarily disclose sensitive information that may jeopardize their legitimacy in the eyes of private-sector stakeholders. The impact of political ties on disclosure is contingent upon two factors. First, market institutions moderate such effects because expectations of public- and private-sector actors may diverge more in freer markets than where the state has inordinate power. Second, financial dependence on the state amplifies both effects as dependence on the state exerts more pressure for compliance whilst making politically connected organizations appear even more questionable in the eyes of the private-sector stakeholders. Leveraging a policy shock that weakened political ties, we found that following the policy shock, charities in China reduced their compliance to state-mandated information disclosure, but increased their voluntary disclosure. The opposing roles of political ties in mandatory versus voluntary disclosure is further supported by a policy capturing study involving private donors in China. This study has important implications for research on political ties and information disclosure.
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spelling pubmed-103810702023-07-29 Channeling and dampening: The role of political ties in information disclosure and concealment Zheng, Weiting Ni, Na Crilly, Donal PLoS One Research Article Non-profit organizations (NPOs) help the state achieve its social objectives. At the same time, they often depend on the private-sector actors for donations. The different beliefs of public- and private-sector actors regarding which practices are desirable for NPOs can affect the transparency of these organizations. We propose that political ties influence NPOs to comply with state-mandated disclosure requirements, while simultaneously dampening their willingness to voluntarily disclose sensitive information that may jeopardize their legitimacy in the eyes of private-sector stakeholders. The impact of political ties on disclosure is contingent upon two factors. First, market institutions moderate such effects because expectations of public- and private-sector actors may diverge more in freer markets than where the state has inordinate power. Second, financial dependence on the state amplifies both effects as dependence on the state exerts more pressure for compliance whilst making politically connected organizations appear even more questionable in the eyes of the private-sector stakeholders. Leveraging a policy shock that weakened political ties, we found that following the policy shock, charities in China reduced their compliance to state-mandated information disclosure, but increased their voluntary disclosure. The opposing roles of political ties in mandatory versus voluntary disclosure is further supported by a policy capturing study involving private donors in China. This study has important implications for research on political ties and information disclosure. Public Library of Science 2023-07-28 /pmc/articles/PMC10381070/ /pubmed/37506088 http://dx.doi.org/10.1371/journal.pone.0289016 Text en © 2023 Zheng et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Research Article
Zheng, Weiting
Ni, Na
Crilly, Donal
Channeling and dampening: The role of political ties in information disclosure and concealment
title Channeling and dampening: The role of political ties in information disclosure and concealment
title_full Channeling and dampening: The role of political ties in information disclosure and concealment
title_fullStr Channeling and dampening: The role of political ties in information disclosure and concealment
title_full_unstemmed Channeling and dampening: The role of political ties in information disclosure and concealment
title_short Channeling and dampening: The role of political ties in information disclosure and concealment
title_sort channeling and dampening: the role of political ties in information disclosure and concealment
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10381070/
https://www.ncbi.nlm.nih.gov/pubmed/37506088
http://dx.doi.org/10.1371/journal.pone.0289016
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