Earnings Management and CSR Disclosure. Family vs. Non-Family Firms

Abstract

Building on Institutional theory and Signaling theory, integrated with the socioemotional wealth (SEW) approach, we studied the effect of earnings management (EM) practices on a firm's Corporate Social Responsibility (CSR) disclosure behavior. In so doing, we analyzed a sample of 226 non-financial, family and non-family listed firms for the period, 2006-2015. Our results suggest that family firms, in instances of downward earnings management, are more prone to diverting attention from these practices by means of CSR disclosure, compared to non-family firms, although the level of family ownership exerts a moderating effect. Moreover, we found that a firm's visibility, in terms of size, significantly enhances this behavior and that the effect is higher for family firms.

Does religion benefit corporate social responsibility (CSR)? Evidence from China

“…Academically, CSR also has drawn more and more attention. Existing studies on CSR have mainly focused on the affecting factors and economic consequences of CSR (Gavana et al, ; Ting & Yin, ; Yang et al, ). In line with the aims of this study, I mainly review the determinants of CSR practice.…”

“…These factors can be classified into internal and external parts. The internal factors often refer to corporate internal governance structure or firm‐level financial factors, such as ownership structure, board composition, managerial incentive mechanism, capital structure, slack resources, and audit (Aguilera, Desender, Bednar, & Lee, ; Calvo & Calvo, ; Gavana et al, ; Yang et al, ; Zhang et al, ). On the other hand, the external factors often include the pressure from stakeholders, legislatures, media coverage, local culture, government, and so on (Aguilera et al, ).…”

“…To enhance a company's sustainable growth, it is important to identify the determinants of CSR. Existing studies on CSR are mainly focused on how corporate governance or finance factors affect CSR (Gavana, Gottardo, & Moisello, ; Yang et al, ) while neglecting the effects of institutions. The recent literature has shown that institutional theory can largely explain company behaviors.…”

“…First, from the perspective of informal institutions (e.g., religion), this paper provides new evidence on the determinants of CSR in China. Existing research on the determinants of CSR has mainly focused on finance or corporate governance factors (Gavana et al, ; Yang et al, ). Relatively few studies have addressed these issues from the macroscopic level, especially informal institutions.…”

Company’s Sustainability and Accounting Conservatism: Firms Delisting from KOSDAQ

“…Second, corporate sustainability is closely related to accounting conservatism. For example, companies that provide high quality corporate social responsibility (CSR) information are less disposed to carry out unethical accounting practices, such as earnings management and tending to be more conservative [12,13]. Third, earnings management through accruals and conservatism can move in different directions.…”