| The Governance Role of Business Entertainment: Evidence from China |
Received:September 15, 2017 Revised:September 15, 2017 |
Key Words: Transaction governance, social relations, business entertainment, China |
| Author Name | Affiliation | | Francis Sun* | Goodman School of Business |
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Abstract: |
| This study examines the transaction governance role of business entertainment with a data set collected from China. The governance perspective on business entertainment proposes that all economic transactions are regulated through a combination of social, market, and legal sanctions and business entertainment plays a governance role by reinforcing social sanctions, especially under the conditions where market and legal infrastructures are under-developed. Through a sample of Chinese manufacturers listed on the Shanghai Stock Exchange, this study has generated empirical results indicating that firms spend more on business entertainment, and hence business entertainment plays a bigger governance role, in regions where market and legal systems are underdeveloped and social sanctions play a major role in transaction governance. These findings support the transaction governance account for business entertainment and have practical implications for business managers and policy makers. |
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