Authoritarian transparency: China's missing cases in court disclosure

Zhuang Liu, T.J. Wong, Yang Yi and Tianyu Zhang

Journal of Comparative Economics, 2022, vol. 50, issue 1, 221-239

Abstract: The question whether authoritarian regimes use transparency initiatives to improve public governance or only to perform window dressing remains open. To address it, we examine a recently promulgated transparency policy in China that mandates public access to all judicial opinions. We find that local courts fail to disclose more than 60% of their opinions in corporate litigation cases, measured against a baseline of publicly listed firms’ disclosure of their litigation, as required and enforced by the securities regulations. Instead of upholding judicial fairness, local courts disclose cases selectively, displaying favoritism and responding to private incentives. Courts are more likely to suppress the publication of their opinions when the firm involved in the litigation is state-owned or is the defendant in its home court, especially in the year before the promotion of the provincial party secretary. We also find that firms whose cases are disclosed by the courts undergo adverse economic consequences, signaling that they have fallen out of favor with the government.

Keywords: Transparency; Corporate litigation; Disclosure bias; SOE; Home court (search for similar items in EconPapers)
JEL-codes: K42 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:50:y:2022:i:1:p:221-239

DOI: 10.1016/j.jce.2021.09.001

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