Determinants of earnings management in Spanish SMEs and its relationship with CSR: the relevance of sector life cycle stage

Martínez-Martínez, Domingo; Peña, Francisco Javier Andrades; Jorge, Manuel Larrán; Reyes, María José Muriel de los; Sancho, María Paula Lechuga

doi:10.1108/jsbed-07-2020-0257

Cited by 17 publications

(12 citation statements)

References 65 publications

(164 reference statements)

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“…Life cycle stages of various industries can impact the relationship between EM and CSR distinctly. Companies with normal sale levels have shown more prominent CSR and have less pressure to legalize decision making (Martinez-Martinez et al, 2021). Moreover, the financial quality of the company in the family business is influenced by the company's governance factors, which means that the relationship between CSR and EM is affected by corporate governance factors (Borralho et al, 2020).…”

Section: Relationship Between Csr and Emmentioning

confidence: 99%

Whether family ownership affects the relationship between CSR and EM: evidence from Chinese listed firms

Rahman

Zheng

2022

JFBM

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PurposeThis study explores the relationship between corporate social responsibility (CSR) and earnings management (EM) in China and whether family ownership impacts this relationship.Design/methodology/approachThe research data are the financial reports and CSR disclosure reports of Chinese listed companies from the CSMAR database for the 2010–2020 period. Ordinary least squares (OLS) regression was used to analyze the relationship between various variables in this study.FindingsResults show that CSR significantly and positively affects accrual-based EM (AEM) but does not affect real EM (REM). Moreover, family ownership influences the positive relationship between CSR and AEM. Compared with non-family enterprises, family enterprises tend to disclose less CSR performance but also have lower AEM behavior.Originality/valueThis result is related to the information transparency of listed enterprises and Socioemotional Wealth theory. This study provides reference for domestic and foreign investors and other stakeholders in understanding the impact of family ownership on the relationship between CSR and earnings management to optimize their investment decisions.

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Section: Relationship Between Csr and Emmentioning

confidence: 99%

Whether family ownership affects the relationship between CSR and EM: evidence from Chinese listed firms

Rahman

Zheng

2022

JFBM

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“…This assertion in form of a transparent financial reporting hypothesis has been proved in multiple settings from individual countries like Taiwan (Chen & Hung, 2021), Spain (Gras-Gil et al, 2016;Martinez-Martinez et al, 2021), UK (Almahrog et al, 2018), France (Ben Amar & Chakroun, 2018), Korea (Cho & Chun, 2016) to international setting (Bozzolan et al, 2015;Kim et al, 2012;Scholtens & Kang, 2013) (Table 1).…”

Section: Theoretical Background Literature Review and Hypothesis Developmentmentioning

confidence: 86%

Are Corporate Social Responsibility Active Firms Less Involved in Earnings Management? Empirical Evidence From China

Pasko

Chen

Проскуріна

et al. 2021

Business: Theory and Practice

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This paper investigates whether corporate social responsibility active (CSR active) firms operate dissimilarly from other firms in their financial reporting. Specifically, we examine whether the corporate social responsibility (CSR) attitude of a firm sways its reporting incentives, in respect of the extent of earning management. To test our predictions, we use a sample of 25,861 year-company observations, corresponding to 3538 Chinese listed companies, for the period 2009–2019. We find a significant positive association between CSR activity and earning management assessed by the level of discretionary accruals in Chinese listed companies. Moreover, we document that Chinese CSR active firms engage more in earnings management through discretionary accruals than CSR inactive firms. These findings are consistent with the opportunistic financial reporting hypothesis: advances in CSR used by managers to safeguard their position by evading scrutiny from stakeholder activists. This study contributes to the growing awareness among investors, stakeholders and researchers that we should distinguish between CSR active firms and socially responsible firms and that being the latter entail something more than just mechanically produce CSR reports.

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“…Family firms provide less environmental information than non-family firms, but this impact will be weakened in the life cycle of family firms [ 38 ]. In addition, relevant studies on corporate earnings management (EM) and CSR found that the stage of the industry life cycle affects the relationship between EM and CSR [ 39 ]. Compared with non-family firms, when earning management is reduced, family firms are more inclined to divert people’s attention from these practices through CSR disclosure [ 40 ], and ESG performance has a significant moderating effect on earnings management [ 41 ].…”

Section: Research Dimensions Of the Environmental Behavior Of Family ...mentioning

confidence: 99%

The Theoretical Lineage and Evolutionary Logic of Research on the Environmental Behavior of Family Firms: A Literature Review

Geng

Xue-yuan

Zhang

2023

IJERPH

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Family firms research is becoming one of the most important and promising areas for theoretical innovation in management practice. Corporate environmental behavior has attracted widespread academic attention, but the research on the environmental behavior of family firms is obviously insufficient, and the relevant research results are still in a fragmented state. In this paper, we review and summarize the existing research on the environmental behavior of family firms from three aspects: the research dimensions, the influencing factors, and the influencing effects, and try to sort out the theoretical lineage and evolutionary logic of the environmental behavior of family firms. From the existing research results, the research on the influencing factors and effects of family firms’ environmental behavior is at the stage of strife, and there is a lack of in-depth and systematic research on the mechanisms affecting the environmental behavior of family firms and the changes of their effects. In the future, we can explore how to apply or integrate multiple theories simultaneously for complementary explanations, so as to provide a reference for the government to formulate targeted policies to stimulate and regulate the environmental behaviors of family firms.

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Determinants of earnings management in Spanish SMEs and its relationship with CSR: the relevance of sector life cycle stage

Cited by 17 publications

References 65 publications

Whether family ownership affects the relationship between CSR and EM: evidence from Chinese listed firms

Whether family ownership affects the relationship between CSR and EM: evidence from Chinese listed firms

Are Corporate Social Responsibility Active Firms Less Involved in Earnings Management? Empirical Evidence From China

The Theoretical Lineage and Evolutionary Logic of Research on the Environmental Behavior of Family Firms: A Literature Review

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