Analyzes the influence of fiscal transparency on agency costs in Chinese corporations, indicating significant effects based on governance structures and competition.
Against the backdrop of global pursuit of sustainable economic development, understanding how governmental institutions influence corporate efficiency is crucial. Fiscal transparency is an essential aspect of fiscal information disclosure and a fundamental prerequisite for advancing fiscal and tax system reforms. This paper analyses the effect of fiscal transparency on corporate agency costs and its underlying mechanisms, utilizing panel data from Chinese A-share listed businesses spanning 2014 to 2023. The results indicate a notable inverted U-shaped correlation between fiscal transparency and corporate agency costs, a conclusion that persists after multiple stability assessments. Mechanism analysis reveals that digital transformation, market competition, and executive team stability significantly mitigate the nonlinear primary effect. Heterogeneity study indicates substantial variations in the influence of fiscal openness on agency costs across different corporate governance frameworks, industry categories, and stages of growth.
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Qiqi et al. (2026) studied this question.
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