IIMS research seminar «Chinese Communist Party Organization Embedding and Corporate Biodiversity Exposure: A New Measure Based on Large Language Models»

Abstract: Biodiversity has become an emerging institutional issue in corporate governance and capital-market information environments, yet little is known about why firms incorporate it into formal disclosure. This paper examines how the embedding of Chinese Communist Party organizations within firms affects corporate biodiversity exposure among Chinese listed companies. From the perspective of political embeddedness and corporate information production, I argue that internal Party organizations do not merely transmit environmental policy pressure. They also reshape firms’ incentives and constraints in producing public narratives.

Using MD&A sections of Chinese A-share firms’ annual reports from 2007 to 2024, this paper constructs a firm-level biodiversity exposure measure that combines dictionary screening, large-language-model semantic annotation, and supervised learning. The measure captures whether biodiversity enters firms’ formal narratives and further identifies disclosure intensity, sentiment, legal-regulatory context, and risk semantics.

The results show that Party organization embedding significantly increases the probability that firms mention biodiversity, but decreases biodiversity sentence share and sentiment while increasing biodiversity risk exposure. These findings suggest that CCP organizational embedding raises the visibility of biodiversity issues while making disclosure more cautious and risk-oriented. Corporate biodiversity exposure is therefore not only an environmental disclosure outcome, but also a strategic response to institutional pressure, policy signals, and responsibility constraints under China’s party-state embedded corporate governance system.

Please register till June 18^th 2 p.m.here:

https://forms.yandex.ru/u/6a18216deb61466b504c3091   

Looking forward to see you at the seminar!