Disclosures on Corporate Social Responsibility (CSR) practices of business organizations have heightened over the past few decades due to increased awareness. Major contributions in the literature on CSR practices and their disclosures come from the studies conducted in the developed world, while many developing economies like Pakistan remain under-researched and fewer revelations have been made about their CSR practices. Therefore, the present study aims to explore various aspects of CSR practices of Pakistani firms and their reporting trends. A multimethod approach has been adopted to measure CSR practices with respect to both approaches, quantitative and qualitative, for 170 listed firms from 2008 to 2015. First, content analysis is employed to develop a CSR Disclosure Index (CSRD Index) as well as five sub indices, i.e., community welfare, health and education, environment and energy, product, and customer and workforce. Second, a multidimensional financial approach is used to calculate firm’s CSR monetary spending ratio (CSR-MSR) using the monetary data of CSR activities. Results suggested that most Pakistani firms disclose more information about their product-, customer-, and stakeholder-related CSR activities and put less emphasis on health and education responsibilities. Moreover, there is a strong impact of government reforms on both the firm’s CSR disclosures and monetary giving.
This study examines the association between corporate social responsibility (CSR) and earnings management (EM) among manufacturing firms from a developing economy, Pakistan. To deal with the CSR measurement and data bias, a multimethod approach has applied to measure CSR (both qualitative and quantitative approaches).This research has also established CSR disclosure indices and CSR monetary spending ratio (CSR MSR). Moreover, this research examines both types of EM (accrual-based as well as real activities-based) and used annual data set from 2009 to 2018 for 160 nonfinancial firms. For empirical analysis, the two-stage least square (2SLS) and pooled ordinary least square (POLS) regressions are used. This study finds a negative relationship between CSR and EM, and it supports the notion that firms' commitment to CSR is largely driven by long-term perspective. However, with respect to each measure of EM and CSR, this relationship is asymmetric. | INTRODUCTIONConsiderable research on corporate social responsibility (CSR) has undertaken to determine what encourages the firms to engage in social activities, and most of the studies concluded that CSR has a positive effect on firms' financial performance (FP) (Calegari
The study adopted a systematic review approach to review the existing studies on the relationship between corporate social responsibility (CSR) and Earnings Management (EM). The aim of this study is to determine whether CSR is an effective tool to promote healthy relationships with stakeholders or CSR is used as an effective strategy by firm's mangers to hide out their involvement in (EM) practices. Results revealed that prior research on the CSR-EM relationship is limited. The majority of the studies found an inverse relationship between CSR and EM. Moreover, mixed results were reported because of the lack of sufficient theoretical support, inappropriate research designs, and varying approaches to measure CSR and EM. This study also synthesizes the various consistencies and inconsistencies in the existing literature of CSR-EM and future research agenda. Policymakers should reward organizations that pursue CSR purely for social and environmental concerns and at the same time they should be vigilant for those which use CSR for shielding their EM practices. K E Y W O R D S corporate social responsibility, earnings' management, systematic review 350 | EHSAN Et Al. 1 | INTRODUCTION After the twentieth century's corporate scandals (Xerox, Enron, Toshiba, Satyam Computer Servives etc.), accounting earnings have attracted the attention of researchers, regulators, investors, shareholders, and other constituents of firms, making it one of the most frequently investigated areas of firms' performance statistics. The information asymmetry between a firm's insiders and outsiders, the imperfect system of auditing, and the varying nature of accounting principles in treating firms' accruals allows managers to manage their reported earnings to gain personal benefits or signal private information to stakeholders (Healy & Wahlen, 1999) and that is called Earnings management (EM). 1 However, EM can have severe consequences because these short-term tactics, undertaken to achieve short-term benefits, are often harmful to firms' long-term sustainability. One of the far-reaching consequences of EM is the loss of credibility of a firm's financial reports, resulting an increase in the activism and vigilance of the firm's internal and external stakeholders and a decrease in their support (Choi, Lee, & Park, 2013). A firm's transparency and accountability in disclosing financial information are critical to its ability to gain the support of its stakeholders and to maintain long-term relationships. From this perspective, accurate financial reporting is closely related to corporate social responsibility (CSR), as CSR encourages the firm to integrate social, ethical, and moral considerations into its goals and to make decisions that protect the interests of a wide range of stakeholders, including employees, customers, suppliers, investors, communities, the environment, and regulators, to foster long-term relationships (Koehn & Ueng, 2010). Thus, financial transparency and reliability are increasingly considered to be key elements in a firm's C...
PurposeOver the last two decades, corporations have increasingly adopted green innovation to lessen the unsuitable impact on the environment and gain competitive advantage at the same time. However, researchers have paid more attention to green product innovation and the firm's financial risk (FFR) relationship than green process innovation. Such neglect of green process innovation has failed to produce an elusive understanding of green process innovation and FFR relationship, and this relationship is necessary to understand for the ongoing debate on “does it pay to be green?” Thus, the purpose of this research is to investigate the relationship between green process innovation performance (GPRIP) and FFR, and it also examines the moderating role of slack resources and competitive intensity in facilitating this relationship.Design/methodology/approachThe authors collected 202 publicly listed Thai manufacturing firms' data using questionnaire survey and firms' financial statements, and this research employed hierarchical moderating regression analyses to test hypotheses.FindingsResults demonstrate that GPRIP negatively influences the FFR. Competitive intensity reinforces the negative relationship between GPRIP and FFR, whereas organizational slack has an unfavorable moderating effect, i.e. firms with ample organizational slack are less likely to reduce their financial risk from higher GPRIP.Originality/valueThe research model contributes to an ongoing debate on “does it pay to be green?” by providing a thorough understanding of GPRIP and FFR relationship, as to the authors' best knowledge, no work to date has examined this relationship. This research also sets out the boundary conditions of the GRPIP and FFR relationship and highlights the critical role of firm-specific condition, i.e. slack resource and market condition, i.e. competitive intensity to reap higher financial benefits from GPRIP.
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