Government Transparency and Firm-Level Operational Efficiency

48 Pages Posted: 19 Jul 2021

See all articles by Ole-Kristian Hope

Ole-Kristian Hope

University of Toronto - Rotman School of Management

Shushu Jiang

University of Toronto, Rotman School of Management, Students

Dushyantkumar Vyas

University of Toronto - Rotman School of Management; University of Toronto at Mississauga

Date Written: July 17, 2021

Abstract

We examine the informational role of governments in the private sector in emerging economies. Using a large sample of private firms, we show that governments’ ability and willingness to collect and disseminate economic information (government transparency) is positively associated with firm-level operational efficiency and access to external financing. Several cross-sectional analyses corroborate our main findings. We find that the effect of government transparency is stronger for firms operating in weaker alternative information environments. We also find a reduced effect of government transparency in countries with better-developed capital markets that facilitate capital allocation and production efficiency. Additional analyses using the World Bank-supported Open Government Data initiative as a staggered shock to government transparency provides further support to our primary results. Overall, our paper sheds light on the important role played by governments in emerging markets in aggregating and disseminating economic information.

Keywords: Government Transparency, Private Firms, Emerging Markets, Open Government Data, Operational Efficiency, Management Accounting

JEL Classification: F30, G30, G38, M10, M16, M40, M41, M42, M48

Suggested Citation

Hope, Ole-Kristian and Jiang, Shushu and Vyas, Dushyantkumar, Government Transparency and Firm-Level Operational Efficiency (July 17, 2021). Rotman School of Management Working Paper No. 3888753, Available at SSRN: https://ssrn.com/abstract=3888753 or http://dx.doi.org/10.2139/ssrn.3888753

Ole-Kristian Hope (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Hope.aspx

Shushu Jiang

University of Toronto, Rotman School of Management, Students ( email )

Toronto, ON
Canada

Dushyantkumar Vyas

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

University of Toronto at Mississauga ( email )

3359 Mississauga Rd N.
3205 William Davis Building
Mississauga, Ontario L5L 1C6
Canada

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