Nexus between corporate social responsibility and earnings management: Sustainable or opportunistic

Ehsan, Sadaf; Tariq, Adeel; Nazir, Mian Sajid; Shabbir, Malik Shahzad; Shabbir, Rizwan; Bares, Lydia; Ullah, Wasim

doi:10.1002/mde.3396

Cited by 45 publications

(35 citation statements)

References 41 publications

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“…The Islamic banks may encounter a more critical and wider mismatch between their assets and liabilities which may have a destructive impact on the profitability of banks (Diamond and Rajan, 2005). Several studies (Akhtar, Ali and Sadaqat, 2011;Ramos Meza et al, 2021;Arasu et al, 2021;Shabbir, 2019;Ehsan et al, 2021;Hamza, 2017) found an inverse relationship between liquidity risk and banks performance in the context of Pakistan. Thus, it is hypothesized that an increase in liquidity risk adversely affects both conventional and Islamic banks' performance.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial risks and performance of conventional and Islamic banks: do reputational risk matters?

Butt

Ayub

Latif

et al. 2022

JIABR

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Purpose The purpose of this paper is to shed light on the reputational risk, which is elusive and difficult to measure due to the lack of its conclusive definition. Literature supports the notion that financial risks may translate into reputational risks that pose threat to bank performance. However, empirical investigations in this context are still at their nascent stage. Design/methodology/approach This study has used a panel dataset for the sample of 24 conventional and Islamic banks regarding the period 2007–2017 by using a structural equation model. Findings The results of this study show that reputational risk partially mediates the relationship between financial risks and the performance of conventional banks. However, for Islamic banks, the reputational risk remains insignificant as a mediator. This study provides significant implications to risk managers in banks, regulators and academics to understand the role of reputational risk linked to financial risks for the improvement of bank performance. Originality/value This study aims to add to the literature by measuring reputational risk through the shareholders reputational score index, which is used as a mediator to determine whether financial risks of banks affect the performance of conventional and Islamic banks in Pakistan.

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Section: Literature Reviewmentioning

confidence: 99%

Financial risks and performance of conventional and Islamic banks: do reputational risk matters?

Butt

Ayub

Latif

et al. 2022

JIABR

Self Cite

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“…Prior studies about loan guarantee in China discussed the motivation of loan guarantees (e.g., Arasu et al, 2021;Beck et al, 2010;Chang & Hong, 2000;Fisman & Wang, 2010;Kumari et al, 2021;Shim, 2006;Uesugi et al, 2010;Wang, 2004), determinants of loan guarantee (e.g., Chen et al, 2011;Feng et al, 2005;Jian & Xu, 2012;Li, 2010;Luo & Tang 2007;Wang & Lin, 2007;) and economic consequences of loan guarantee (e.g. Beck & Demirguc-Kunt, 2006;Chatterjee, 2019;Ehsan et al, 2021;Gao & Song, 2007;Gong & Wu, 2005;Jun et al, 2021;Khanna & Palepu, 2000;Laeven, 2003;Liu et al, 2020;Ma et al, 2014;Matloob et al, 2020;Nguyen et al, 2020;Saleem et al, 2019;Samujh et al, 2012;Shabbir & Wisdom, 2020;Shabbir et al, 2020a,b;Sheng et al, 2016;Uroos et al, 2021;Wang & Luo, 2006;Yu et al, 2020;Wang et al, 2014;Zhang & Jiao, 2017). Hirst et al (2008) suggested that MEF is a critical voluntary disclosure mechanism that can influence a firm's reputation by providing a transparent and accurate report about the firm's credibility.…”

Section: Literature Reviewmentioning

confidence: 99%

The Economic Consequences of the Loan Guarantees and Firm’s Performance: A Moderate Role of Corporate Social Responsibility

Ramos‐Meza

Bashir

Jain

et al. 2021

Global Business Review

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This study examines the causal relationship between loan guarantee and firm’s performance through a moderate role of corporate social responsibility (CSR). This study used 350 non-financial firms of China for data analysis. This study used annual panel data set from non-financial firms starting from 2009 to 2019. The findings show that a positive significant association exists among the relationship between loan guarantee and firm’s performance. Moreover, a moderate role of Corporate Social Responsibility also strengthens the relationship between the loan guarantee and firm’s performance. Furthermore, the logit regression results show that the loan guarantee, financial performances and CSR are negatively affecting the long-term zero-debts through all combinations. Also, the financial performances and loan guarantees are negatively influencing the constraints of firms in China, which shows that the financial performances and loan guarantee improvement of the firms lead to removing the constraints of firms in China.

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“…Following prior research, we assume that CSR may not be the determinant, but the consequence of EM (Choi et al, 2013;Grougiou et al, 2014;Martínez-Ferrero et al, 2015;Velte, 2019;Faisal et al, 2018;Ehsan et al, 2021). Thus, to address potential reverse Corporate social responsibility causality issues of our topic, we perform a regression analysis on the relationship between EM and CSR and we use the following model:…”

Section: Additional Analysis: Bidirectional Relationshipmentioning

confidence: 99%

Does CEO power moderate the link between corporate social responsibility and bank earnings management

Miladi

Chouaibi

2021

JGR

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Purpose This paper aims to investigate the relationship between corporate social responsibility (CSR) and earnings management (EM) in US commercial banks and examines whether the chief executive officer (CEO) power can moderate this relationship. Design/methodology/approach For a sample of American commercial banks covering 2009–2018, several equations and regressions are used to measure the main proxies for bank EM. The authors use the fixed effects model and generalized method of moment to investigate the CSR–EM relationship. Findings The authors find a significant positive relation between CSR and EM. Moreover, the authors find that CEO power moderates the CSR–EM relationship. This study also suggests a bidirectional relationship between CSR and EM. Research limitations/implications The findings of this paper have important policy implications for policymakers, regulators and investors in their attempts to constrain EM practices and enhance the quality of financial reporting in US commercial banks. Originality/value The study contributes to the literature by exploring the relationship between CSR practices and firm EM by particularly focusing on banking. This study offers new insights into whether the association between CSR practices and EM is moderated by the CEO power. To the best of the knowledge, the relationship between CSR and EM is not studied yet with the moderating role of CEO power.

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Nexus between corporate social responsibility and earnings management: Sustainable or opportunistic

Cited by 45 publications

References 41 publications

Financial risks and performance of conventional and Islamic banks: do reputational risk matters?

Financial risks and performance of conventional and Islamic banks: do reputational risk matters?

The Economic Consequences of the Loan Guarantees and Firm’s Performance: A Moderate Role of Corporate Social Responsibility

Does CEO power moderate the link between corporate social responsibility and bank earnings management

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