Purpose As an important government behavior that alters the spatial layout of jurisdictions, government resident relocation contributes to the efficiency of regional resource allocation; however, its impact on corporate development, particularly regarding information disclosure quality, remains underexplored in accounting and corporate governance research. The purpose of this study is to investigate the mechanisms and heterogeneity of this effect on accounting disclosure practices using Chinese evidence. Design/methodology/approach The authors use a multiperiod difference-in-differences design using A-share listed firms from 2001 to 2023. Data on government relocation are manually collected and merged with corporate accounting and financial databases. Mechanism and heterogeneity tests are conducted to explore mediating pathways and subgroup differences in accounting disclosure quality. Findings The authors’ findings reveal that government resident relocation significantly improves corporate accounting information quality in the implementation year, though the effect attenuates over time. The improvement in accounting disclosure is driven by reduced economic policy uncertainty and eased financing constraints. Effects are stronger in state-owned enterprises, firms with higher ownership concentration and those without executive political connections. Practical implications The results suggest that government relocation can act as a short-term instrument to boost corporate transparency. To extend its impact, policymakers should adopt complementary measures, such as enhancing policy communication and encouraging local financial agglomeration, and tailor support toward firms with fewer political connections or resources. Companies, in turn, should proactively adapt their disclosure strategies to the new institutional landscape, leveraging reduced uncertainty to strengthen reporting frameworks and signal credibility to investors. Originality/value This study contributes to the literature by establishing and examining the underexplored link between government spatial relocation and corporate accounting disclosure. It not only clarifies the mechanisms (economic policy uncertainty and financing constraints) but also identifies the boundary conditions of this effect, thus offering novel insights that enrich the literature on accounting information and corporate governance.
Yang et al. (Mon,) studied this question.