Are Controlling Shareholders Influencing the Relationship Between CSR and Earnings Quality? Evidence from Chinese Listed Companies

Li, Antai; Xia, Xinping

doi:10.1080/1540496x.2018.1434070

Cited by 11 publications

(15 citation statements)

References 37 publications

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“…Despite the increasing number of studies that shows there is a link between CSR and financial performance; however, to the best of our knowledge, there are few prior studies concerning the link between CSR and EQ. Recently, the researches of Timbate and Park, 2018;Li and Xia, 2018;Alsaadi et al, 2017;Martnez-Ferrero et al, 2016;Gil et al, 2016;Martinez-Ferrero et al, 2015;Kim et al, 2012;Hong and Andersen, 2011; concluded that CSR is positively associated with EQ and firms, which would support the ideas that firms with a higher degree of CSRD and practices are less to engage in earnings management and provide a higher level of EQ.…”

Section: Content Analysis Csrd Ethical Hypothesis Transparency Earninmentioning

confidence: 93%

“…Highlighting publications of some authors, that links positively CSR and EQ. More recently Li and Xia (2018); using Chinese data from the year 2008 examined the relationship between the level of CSR and EQ, they found a positive link between these both variables, suggesting that firms with a great level of CSR tend to provide higher EQ. Similarly, Alsaadi et al (2017); find that socially responsible firms are less likely to engage in earnings management (great EQ) using a data set from 10 European countries over the period of 2003 to 2013.…”

Section: Content Analysis Csrd Ethical Hypothesis Transparency Earninmentioning

confidence: 99%

“…Following the prior study, we added several control variables that could affect CSRD and financial reporting behavior (Li and Xia, 2018;Timbate and Park, 2018;Alsaadi et al, 2017;8 Gil et al, 2016;Muttakin et al, 2015;Kim et al, 2012). First, we control leverage (Lev) an indicator of the firm's financial structure.…”

Section: Control Variablesmentioning

confidence: 99%

“…Consistent with the prior studies (Li and Xia, 2018;Alsaadi et al, 2017;Gil et al, 2016;Muttakin et al, 2015), the basic model was estimated through panel data regressions applying a fixed effect. We detected multicollinearity among our variables applying the Variance Inflation Factor (VIF).…”

Section: Basic Modelmentioning

confidence: 99%

“…While few prior study has documented a positive (negative) impact of CSR on EQ (Prior et al, 2008); Hong & Andersen, 2011;Kim et al, 2012;Scholtens & Kang, 2013;Martinez-Ferrero et al, 2015;Muttakin et al, 2015;Bozzolan et al, 2015;Gil et al, 2016;Martinez-Ferrero et al, 2016;Alsaadi et al, 2017;Timbate and Park, 2018;Li and Xia, 2018, these prior studies focuses almost exclusively on CSRD index, without considering that both positive and negative indicators of CSRD appear to provide information that reduces earning management activity and increase earnings quality. The interpretation of positive and negative indicators can be different for each investor, to avoid losing useful information about CSRD.…”

Section: Introductionmentioning

confidence: 99%

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La asociación entre las Actividades de Responsabilidad Social Corporativa y la calidad de los ingresos: Evidencia de la industria extractiva

Siueia

Wang

2019

RC-SAR

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Building on the ethical theory to solve the research questions, we examine the relationship between Corporate Social Responsibility Disclosure (CSRD) and Earnings Quality (EQ). Using 368 firm-year observations covering the 2010-2017 period. In so doing, we applied content analysis to assess the CSRD dimensions, and we applied discretionary accruals as a proxy of EQ activity. Based on panel data regression, we find a significant and negative relationship between CSRD and EQ in Mozambican extractive industry. Empirical evidence also shows that the influence of positive CSRD indicator (CSRD strengths scores) is much stronger than that negative CSRD indicator (CSRD concerns scores) in reducing earnings quality. These findings are consistent with the idea that the opportunistic managers use CSRD to reach their particular interest, suggesting that the managers are using CSRD as a strategic device to engage in earnings management (poorer earnings quality). The results are robust to alternative proxy measures of CSRD and earnings quality. Con base en la teoría ética para resolver las cuestiones de investigación, examinamos la relación entre Divulgación de Responsabilidad Social Corporativa (CSRD) y la Calidad de los Ingresos (EQ). Usando 368 observaciones de año base cubriendo el período 2010-2017. Al hacer esto, aplicamos el análisis de contenido para evaluar las dimensiones de la CSRD y aplicamos acrecimientos discrecionales como proxy de la actividad de EQ. Con base en la regresión de datos en panel, encontramos una relación significativa y negativa entre el CSRD y el EQ en la industria extractiva de Mozambique. La evidencia empírica también muestra que la influencia del indicador positivo de CSRD (puntuaciones de fuerza CSRD) es mucho más fuerte que el indicador negativo de CSRD (CSRD se refiere a las puntuaciones) en la reducción de la calidad de ingresos. Estas constataciones son consistentes con la idea de que los gerentes oportunistas utilizan la actividad de RSCD para alcanzar su interés particular, sugiriendo que los gerentes están usando el CSRD como un dispositivo estratégico para involucrarse en la gestión de resultados (peor EQ). Los resultados son robustos a medidas alternativas de proxy del CSRD y la EQ. Industria extractiva.

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Section: Content Analysis Csrd Ethical Hypothesis Transparency Earninmentioning

confidence: 93%

Section: Content Analysis Csrd Ethical Hypothesis Transparency Earninmentioning

confidence: 99%

Section: Control Variablesmentioning

confidence: 99%

Section: Basic Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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La asociación entre las Actividades de Responsabilidad Social Corporativa y la calidad de los ingresos: Evidencia de la industria extractiva

Siueia

Wang

2019

RC-SAR

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ESG, ESG rating divergence and earnings management: Evidence from China

Mao,

Wang,

Lin

2024

Corp Soc Responsibility Env

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The existing studies on the relationship between ESG and earnings management provide mixed evidence and ignore ESG rating divergence. Using a sample of Chinese listed firms from 2009 to 2021, we examine the effect of ESG performance on earnings management under different levels of ESG rating divergence. The results reveal a negative association between ESG performance and earnings management. Meanwhile, among firms with high (low) ESG rating divergence, our results show that the degree of earnings management rises (falls) when the firms engage in ESG practices. Our findings are robust to alternative variable definitions and the Heckman two‐stage selection model. In addition, we exclude alternative explanations and consider the effect of greenwashing. Cross‐sectional analyses show that the moderating effect of ESG rating divergence is significant only among firms with greater CEO power and higher agency costs, suggesting that agency problems are the mechanism by which ESG rating divergence positively moderates the relationship between ESG performance and earnings management. This study advances the existing research on ESG and earnings quality by presenting new empirical evidence and revisits ESG rating divergence through the lens of agency theory, revealing that management could use ESG for opportunistic behavior in the presence of ESG rating divergence. Our study shows that the divergence in ESG ratings can affect the economic consequences of firms' ESG practices, offering insights for future research on ESG and ESG rating divergence and for regulators to improve the regulation of ESG disclosure and rating.

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Do academic independent directors matter? Evidence from stock price crash risk

Jin

Wang

et al. 2022

Journal of Business Research

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Are Controlling Shareholders Influencing the Relationship Between CSR and Earnings Quality? Evidence from Chinese Listed Companies

Cited by 11 publications

References 37 publications

La asociación entre las Actividades de Responsabilidad Social Corporativa y la calidad de los ingresos: Evidencia de la industria extractiva

La asociación entre las Actividades de Responsabilidad Social Corporativa y la calidad de los ingresos: Evidencia de la industria extractiva

ESG, ESG rating divergence and earnings management: Evidence from China

Do academic independent directors matter? Evidence from stock price crash risk

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