C31RM Research Methods: A Review of CER Studies in China (2019)

This report critically reviews the article 'A review of Chinese and English language studies on corporate environmental reporting in China,' focusing on the research question of whether studying English alongside Chinese positively affects CER in China. It highlights the importance of the article in understanding China's role in global environmental conservation, particularly its transition from a planned to a market economy and the subsequent impact on corporate reporting. The review discusses how economic liberalization empowered company managers, leading to increased environmental awareness and transparent reporting. It also emphasizes the role of English language adoption in aligning Chinese accounting practices with international standards. The author's motive is identified as highlighting the significant role of emerging economies in environmental conservation, underpinned by corporate social responsibility theory. The analysis uses secondary data and concludes that the findings are consistent with the recommendations, suggesting further research into other emerging economies like India.

Running head: CER IN CHINA
CER in China
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Part 1. Research question:................................................................................................................2
Part 2. Importance of the article chosen:.........................................................................................2
Part 3. Importance of the outcomes:................................................................................................5
Part 4. Motive of the author to write the article:..............................................................................6
Part 5. Theory underpins in the research:........................................................................................6
Part 6. Key motivating literature:....................................................................................................6
Part 7. Research method chosen:.....................................................................................................7
Part 8. Selecting of sample:.............................................................................................................7
Part 9. Validity and reliability:........................................................................................................7
Part 10. Analysis of the results:.......................................................................................................7
Part 11. Conclusions and Recommendation consistence with findings:.........................................7
References:......................................................................................................................................8

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Part 1. Research question:
The research question which can be attributed to the chosen article namely, ‘A review of
Chinese and English language studies on corporate environmental reporting in China.’,
would be, Would study of English language besides Chinese language have positive effects
on the corporate environmental reporting or CER in China?’
Part 2. Importance of the article chosen:
The review of the article chosen namely ‘A review of Chinese and English language
studies on corporate environmental reporting in China.’ reveals several important facts. The
importance of the facts are more relevant because the entire article revolves around one of the
fastest emerging economic giants-China. The article brings into the light the tremendously
significant roles the emerging global giants like China are likely to play in global environmental
conservation.
The first important aspect of the article is that it sheds light on the significance of
corporate environmental reporting. The introductory section clearly mentions that the country is
negotiating on the grounds of social equity and environment protection to gain economic growth.
The section then goes on to mention that Chinese is the dominant language used of presenting
corporate reports. The use of English language as the language of corporate culture within the
country was very limited. This created a wide disparity between the linguistic expressions used
in corporate environmental reporting in China and in its western counterparts like the United
States of America. The western scholars were not much acquainted with the Chinese language
and were not able to study the Chinese CER deeply. The Chinese were not able to incorporate
the advanced features of the western corporate reporting system in force like internationally

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accepted system of accounting in their own system. This gap between the Chinese systems of
corporate accounting and western accounting system could be attributed to the Chinese external
environmental factors like political factors and economic systems which were largely under the
control of the Chinese government. However, the trend started undergoing a rapid change when
China started shifting from a ‘planned economy’ to that of a ‘market economy’. This evolution
of China into a market economy with diminishing government control brought several positive
changes in the ways the companies conducted their respective environmental reporting.
The second important finding from the analysis was that as China evolved into a market
economy, the role of the government also underwent a high rate of change. The section 2.1.
throws light on the nature of the Chinese corporate system prior to the period around 2010 when
the country embraced a market oriented economic system. The section first mentions that most
of the Chinese listed companies were controlled by the government at central, state or local
government levels. The Chinese companies under the control of the government bodies did not
provide decision making powers to the top managers. The private sector in China occupied a less
important role in the economic development due to the stringent market control strategy of the
government. The listing procedure the private companies had to undergo to adopt public limited
status was dependent strong on a reservation or ‘quota’ system and ‘political favoritism’. This
means that the private companies not under the control of the government did not get the scope
to undergo listing which was reserved for the government controlled companies (Yang, Craig
and Farley 2015).
The third important aspect of the article is the change of economic systems in China to a
market oriented system and the benefits the transition ushered on the corporate organisations in
the country as well as their reporting methods. The section 2.2 called ‘China’s institutional

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transition from bureaucratic secrecy to openness’ mentions that after the market liberalization,
the managers of the Chinese public limited companies were empowered to take more important
decisions. The government bodies in China owing to their liberalization of the corporate sector
imposed less control on the companies. This loosening of control enabled the Chinese companies
to increase their productivity to earn higher profits at the expense of the environmental aspects.
Thus, the analysis shows that the Chinese government in order to enable companies earn higher
profit in order to generate higher taxes on their profits, encouraged environmental degeneration.
The rising awareness about increasing environmental pollution in the country among the
stakeholders like the Chinese society and customers resulted in creation on pressure on the
Chinese government to take actions to curb environmental pollution the expanding corporate
sector was causing. This increasing pressure required the Chinese companies to embrace the
system of environmental reporting. The Government of China post liberalization, did not make
it mandatory for the companies under its control to furnish environmental records in the public.
However, with the Chinese economy embracing the market system, the Chinese companies came
under the pressure to publish environmental reports in the market. This enhanced their
transparent reporting levels which enhanced their goodwill. Thus, the analysis shows that
economic liberalization had positive impact on corporate environmental reporting or CER.
The fourth important aspect of the article is that the liberalization of the Chinese
economy gave to radical changes in the accounting systems followed in the Chinese companies
which enforced more transparent CER. The third section namely, ‘Accounting research in the
Chinese academic context’ could be considered as a more detailed explanation of introductory
section. The spread and acceptance of English language in the Chinese economy besides Chinese
as the language of corporate reporting enhanced the accounting operations in the companies. The

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article in this throws light on the fact that spread of English language enabled the Chinese
companies to learn the internationally accepted American accounting system. The American
scholars were able to develop a more transparent picture about the Chinese CER. Similarly, the
Chinese accounting experts were able to obtain accounting knowledge and certificates from the
American universities. These accounting professionals were able to introduce the American
accounting system in China which encouraged more transparent and responsible accounting
methods. The companies in China adopted the system of transparent accounting which they
applied in the fields of corporate environmental reporting as well. In fact the article mentions that
embracing of the American system of accounting which was the outcome of the liberalization of
the Chinese economy holds high importance as far as China is concerned. This was because
being one of the fastest growing economy in the world and growing collaboration with the
western markets like the US, China required to develop a more transparent picture on the global
stage about its stand on crucial matters like environmental reporting. Thus, it can also be inferred
from the discussion that embracing of American accounting system strengthened CER.
Part 3. Importance of the outcomes:
The analysis of the article mentioned above can lead to three important outcomes or
findings which are important. The first outcome or finding from the analysis is that acceptance
globally accepted international languages like English promotes corporate reporting. This
outcome is important since it is clear that emerging global giants like China owing to the
booming commercial sectors have immense impacts on the environment. The precedence of
Chinese language in China in the pre-liberalization prevented the other developed markets like
the US from development of fair idea about corporate environmental reporting in China. This
resulted in lack of transparency between the two countries and foreign companies did not

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consider Chinese market profitable. The Chinese market similarly owing to lack of foreign
investments experienced very limited growth. The second outcome of the analysis is that
economic liberalization promotes economic development and more transparent corporate
environmental reporting system. This is important because it can be pointed out that prior to
acceptance of market oriented system, the companies operating in China were under governance
dominance. The government of China did not mandate publishing of CER before the
stakeholders. The management of the companies under the protection of the government had not
decision making power. The economic liberalization led to the empowerment of the managers in
these companies to take important business decisions. Thus, this finding is important because it
throws light on the fact that economic liberalization encourages more transparent CER.
Part 4. Motive of the author to write the article:
The motive of the authors Yang, Craig and Farley to write the article now because they
wanted to point out the important roles which emerging economies like China are playing in
global environmental conservation. This fact becomes evident when the authors mention that
China is the second largest economy in the world with immense potential to contribute towards
preservation of environment in the first paragraph of the ‘Context’ section. Thus, it is clear that
the authors stress on the important roles which the emerging economies can play in
environmental conservation.
Part 5. Theory underpins in the research:
The authors Yang, Craig and Farley mentioned the term corporate environmental
reporting or CER which is very similar to corporate social responsibility or CSR reporting. Thus,
it can be pointed out that the theory on which the report stands on is CSR theory. The authors
have used the theory appropriately.

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Part 6. Key motivating literature:
The two key motivating literature are ‘Redefining Corporate Social Responsibility’ by Crowther,
D. and Seifi and Corporate social responsibility by Unit.
Part 7. Research method chosen:
The authors in the article have chosen secondary analysis method. It can be justified that
the method is relevant because the in depth research in the topic required analysis of three
articles.
Part 8. Selecting of sample:
The authors selected three articles which is evident from the ‘method’ section. Hence the
selection of sample size was not used.
Part 9. Validity and reliability:
There is no issue pertaining to the validity of the research.
Part 10. Analysis of the results:
The strength of the analysis of the results lies in the in-depth secondary analysis. The
weakness of the research lied in the absence of primary analysis.
Part 11. Conclusions and Recommendation consistence with findings:
The conclusions and recommendations are consistent with the findings. The topics have
been explained very lucidly. As far as future insights are concerned, it can be pointed out that the
article could also have spoken about other emerging economic giants like India.

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References:
Crowther, D. and Seifi, S. eds., 2018. Redefining Corporate Social Responsibility. Emerald
Group Publishing.
Unit, B., 2015. Corporate social responsibility.
Yang, H.H., Craig, R. and Farley, A., 2015. A review of Chinese and English language studies
on corporate environmental reporting in China. Critical Perspectives on Accounting, 28, pp.30-
48.