Political Promotion And Positive Media Coverage In Chinese Stated-owned Enterprises

As one of the important implicit incentive mechanisms, top Managers’political promotion issues in the state-owned enterprises (SOEs) have attract the scholars’ more attention recently. The top executives of SOEs are different with the ordinary top managers, just because:first of all, the SOEs’top managers are usually appointed by the superior government, have a certain administrative level and enjoy the same treatment with the civil servants. Secondly, the cross appointment between the top executives of SOEs and government officials are common phenomenon, on one side, many SOEs’top managers have the experience as government officials, on the other side, "a good businessman can become an official", thus, some top executives achieved the "cross-border transition" and become government officials. Finally, the SOEs’top executives see themselves as more officials rather than professional managers, and they tend to seek personal political ambitions and aspirations to achieve. Therefore, when the top managers who have strong preference for political promotion, they will face higher promotion opportunities, in consequence, the political promotion motivation always have an important impact on the corporate performance and the executives’behavior. The existing research have focused on the effect of political promotion to compensation contracts, job consumption, investment, image construction, etc., but researchers have not yet focused on the relationship between top executives’ political promotion in the SOEs and positive media coverage. Zheng et al. (2012) through the case study in their paper found that before a period of time that the top managers achieve political promotion successfully, the number of corporate positive media coverage are in the front of the industry. Thus, this paper speculated that in order to realize the political promotion successfully, the SOEs’top managers with high opportunities of political. promotion have strong incentives to improve the positive media attention, convey the company’s "good information", and then enhance the enterprises’ reputations and image. At the same time, advertisements and donations can always increase the number of positive media coverage significantly, so they are used as ways to improve the positive media attention by the executives, it means that advertisements and donations have mediating effects between the top managers’ political promotion in the SOEs and positive media coverage.Therefore, based on the review of former related literatures, this paper investigates the relationships between political promotion and positive media coverage, as well as the mediating effects of advertisements and donations by empirical study. Using the data of Chinese state-owned listed companies from 2008 to 2012, the paper finds that:the top executives with higher opportunities to realize political promotion, their companies take more positive media coverage. On the contrary, the higher the chance of SOE executives leave there is a low degree of positive media attention. At the same time, advertisements and donations play mediating roles between political promotion and the enterprises’ positive media coverage. This study’s conclusions are not only enriches the related research of top managers’ political promotion in the SOEs’ and media coverage, but also provide some enlightenments about the incentive problems of SOE’s managers in practice.There are some possible innovations of this paper:first, this paper take the media coverage to the research field of political promotion for the first time, to explore the relationship between political promotion and positive media coverage, thus enrich former study of executive’s promotion and career incentives consideration, proposed a new perspective of the political promotion. Second, former media coverage studies usually investigate the supervising effect of the negative media attention, but this paper take positive media coverage variable into political promotion fields to explore this particular mechanism between the two variables, thus it provides a new research points about the studies of media coverage. Third, as the important expenses of enterprises, advertisements are always investigated its purpose and effect in the field of marketing, however, this paper firstly takes it as a mediating variable to examine its mechanism, providing a novel perspective. In addition, there have been studies on corporate donations literatures about its social response and factors, but few studies research donations mediating effect. This paper also introduces corporate donations as an intermediate variable to explore its mediating effect between the political promotion and positive media coverage, which is the first attempt in the field of donations.