IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v86y2025ipbs1544612325017106.html

Promotion-driven growth targets and managerial myopia: Evidence from China

Author

Listed:
  • Wang, Yihan
  • Yu, Xiangnong
  • Ma, Baolin
  • Huang, Qingcheng

Abstract

Leveraging a panel dataset of Chinese listed companies spanning 2009–2023, this research examines the impact of local government economic growth targets (EGTs) on managerial myopia. Our results demonstrate a statistically significant positive correlation between EGT and managerial myopia. Environmental heterogeneity analysis reveals that this effect is strongest in the final phase of the Five-Year Plan cycles and in regions with “multi-tiered target amplification.” The positive association is most pronounced among private enterprises and those with executives who lack diverse professional backgrounds. These findings provide micro-level evidence to support the optimization of governmental target-setting mechanisms and the advancement of corporate governance reforms.

Suggested Citation

  • Wang, Yihan & Yu, Xiangnong & Ma, Baolin & Huang, Qingcheng, 2025. "Promotion-driven growth targets and managerial myopia: Evidence from China," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325017106
    DOI: 10.1016/j.frl.2025.108456
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325017106
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.108456?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Liu, Dayong & Xu, Chunfa & Yu, Yongze & Rong, Kaijian & Zhang, Junyan, 2020. "Economic growth target, distortion of public expenditure and business cycle in China," China Economic Review, Elsevier, vol. 63(C).
    2. Li, Yi & Wang, Pengfei & Zhang, Wei, 2023. "Individual investors matter: The effect of investor-firm interactions on corporate earnings management," Journal of Corporate Finance, Elsevier, vol. 83(C).
    3. Yasemin Y. Kor, 2003. "Experience-Based Top Management Team Competence and Sustained Growth," Organization Science, INFORMS, vol. 14(6), pages 707-719, December.
    4. Shijie Li & En Xie, 2024. "The effect of economic growth target constraints on ESG," Applied Economics Letters, Taylor & Francis Journals, vol. 31(18), pages 1921-1924, October.
    5. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    6. Hend Monjed & Salma Ibrahim, 2020. "Risk disclosure, income smoothing and firm risk," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 21(3), pages 517-533, June.
    7. Jingtao Zhao & Kewei Cheng, 2023. "Economic growth target management and the quality of economic development: evidences from China," Applied Economics Letters, Taylor & Francis Journals, vol. 30(16), pages 2224-2229, September.
    8. repec:eme:jaar00:jaar-05-2019-0085 is not listed on IDEAS
    9. Francois Brochet & Maria Loumioti & George Serafeim, 2015. "Speaking of the short-term: disclosure horizon and managerial myopia," Review of Accounting Studies, Springer, vol. 20(3), pages 1122-1163, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Can Zhang & Tengfei Liu & Jixia Li & Mengzhi Xu & Xu Li & Huachun Wang, 2023. "Economic Growth Target, Government Expenditure Behavior, and Cities’ Ecological Efficiency—Evidence from 284 Cities in China," Land, MDPI, vol. 12(1), pages 1-30, January.
    2. Yuan, Huaxi & Zou, Longhui & Feng, Yidai, 2023. "How to achieve emission reduction without hindering economic growth? The role of judicial quality," Ecological Economics, Elsevier, vol. 209(C).
    3. Yan, Siqi & Wang, Jian & Wu, Qun, 2025. "How does economic growth targets influence vegetation dynamics? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1476-1491.
    4. Ge, Tao & Li, Chunying & Li, Jinye & Hao, Xionglei, 2023. "Does neighboring green development benefit or suffer from local economic growth targets? Evidence from China," Economic Modelling, Elsevier, vol. 120(C).
    5. Chen, Bochao & Wang, Hang & Wang, Xianbin, 2024. "Innovation Like China: Evidence from Chinese Local Officials' Promotions," China Economic Review, Elsevier, vol. 86(C).
    6. Junsong Wang & Bingquan Lin, 2024. "The dilemma between economic development and environmental protection: How political leadership turnover influences urban air pollution in China?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 23663-23681, September.
    7. Liang, Quanxi & Huang, Jinlan & Liang, Mingjun & Li, Jingxiang, 2024. "Economic growth targets and bank risk exposure: Evidence from China," Economic Modelling, Elsevier, vol. 135(C).
    8. Yu Hao & Jingwen Huang & Yunxia Guo & Haitao Wu & Siyu Ren, 2022. "Does the legacy of state planning put pressure on ecological efficiency? Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3100-3121, November.
    9. ZhengZheng Shi & Hongwen Chen & Kunxian Chen, 2023. "Does the economic growth target overweight induce more polluting activities? Evidence from China," PLOS ONE, Public Library of Science, vol. 18(3), pages 1-17, March.
    10. Keliang Wang & Bin Zhao & Tianzheng Fan & Jinning Zhang, 2022. "Economic Growth Targets and Carbon Emissions: Evidence from China," IJERPH, MDPI, vol. 19(13), pages 1-16, June.
    11. Tang, Tianwei & Jiang, Xiaojing & Zhu, Kaiwen & Ying, Ziyao & Liu, Wenyu, 2024. "Effects of the promotion pressure of officials on green low-carbon transition: Evidence from 277 cities in China," Energy Economics, Elsevier, vol. 129(C).
    12. Liu, Shulin & Wang, Xianbin & Huang, Liangxiong, 2025. "Economic growth target fluctuation and bond issuance by LGFVs," International Review of Economics & Finance, Elsevier, vol. 98(C).
    13. Tang, Pengcheng & Jiang, Qisheng & Mi, Lili, 2021. "One-vote veto: The threshold effect of environmental pollution in China's economic promotion tournament," Ecological Economics, Elsevier, vol. 185(C).
    14. Cong Yu & Linke Hou & Yuxia Lyu & Qi Zhang, 2022. "Political competition, spatial interactions, and default risk of local government debts in China," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 717-743, June.
    15. Zhai, Ying & Wang, Wenzhi & Zhou, Liying, 2024. "Green efficiency loss caused by economic growth goals: Evidence from an emerging economy," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 983-995.
    16. Zhang, Zhengyong & Xu, Zefeng & Ding, Yi, 2023. "Do economic growth target constraints affect firm innovation?," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 373-388.
    17. Enji Li & Ziwei An & Chen Zhang & Hua Li, 2022. "Impact of economic growth target constraints on enterprise technological innovation: Evidence from China," PLOS ONE, Public Library of Science, vol. 17(8), pages 1-21, August.
    18. Zhang, Zhaoqiang & Li, Jie & Ji, Yunyang, 2025. "Investment growth target and the composition of government expenditure: Theory and evidence from China," Journal of Asian Economics, Elsevier, vol. 98(C).
    19. Liu, Yingxuan & Dou, Huan & Liu, Yuanyuan, 2025. "The influence of institutional pressure on the target trade-off of state-owned enterprises: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 101(C).
    20. Yang, Haodong & Zhang, Yumei & Wang, Gaofeng & Liu, Li, 2025. "Intellectual property governance and academic technology transfer," Technovation, Elsevier, vol. 148(C).

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325017106. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.