This paper examines the effect ofguanxion the relation betweenfirm value and voluntarydisclosure of information about new investment projects in China’s institutional setting.Wefind a negative relation betweenfirm value and voluntary disclosure forfirms that relyheavily onguanxiin their value creation (e.g. non-high-techfirms, andfirms located inregions with underdeveloped institutions). By contrast, forfirms that rely less heavily onguanxiand more on other sources of core competencies (e.g. high-techfirms, andfirms inhigh-marketisation regions), wefind a positive relation betweenfirm value and voluntarydisclosure. The moderating role ofguanxion the relation betweenfirm value and voluntarydisclosure is explained byfirms conscientiously balancing the costs and benefits ofvoluntary disclosure relative toguanxi. Specifically, highguanxi-dependencefirms refrainfrom detailed voluntary disclosures for fear of revealing sensitive information that mayharm theirguanxi. In contrast, lowguanxi-dependencefirms rely more heavily onvoluntary disclosures to reduce information asymmetry andfinancing cost, with suchincentives being particularly strong for high valuefirms. Our evidence has implications forresearch on motives for disclosure and regulation offinancial reporting.