Does corporate social responsibility reduce earnings management ? The moderating role of governance and ownership
جاري التحميل...
التاريخ
المؤلفين
عنوان الدورية
ردمد الدورية
عنوان المجلد
الناشر
Management international,
خلاصة
Scarcities of resources, global warming, greenhouse effect, working conditions and treatment of employees are environmental and social issues that civil society recognizes. This has exacerbated the focus on corporate social responsibility (CSR, hereafter) in recent years among academics, consumers, governments and investors. The purpose of this paper is to investigate the relationship between corporate social responsibility and earnings management and the moderating effect of corporate governance and ownership structure on this relationship.
Using panel data for a sample of French listed companies between 2010 and 2013, we find that CSR engagement constrain earnings management practices suggesting that managers would comply with the ethical requirements and satisfy stakeholders’ interests. The results also show that the effect of CSR on earnings management is particularly stronger in more independent boards and with high institutional ownership structure. These corporate governance devices help mitigating managerial opportunistic behavior.
Our study contributes to the literature by investigating the concept of, "ethics", which changes the behavior of leaders about the earnings management practices. The emphasis was placed on the role of ethics in the field of finance. CSR encourages managers to be responsible by disclosing relevant and reliable information. Investors in the market are always looking for this type of information.
Furthermore, our results help all market participants to better understand the role of CSR in the company's transparency processes. This is why, French authorities should support the development of initiatives on CSR activities.
Keywords: Corporate social responsibility; Earnings management, Discretionary accruals, Corporate governance