scholarly journals Corporate Social Responsibility and Earnings Management: Moderating Impact of Economic Cycles and Financial Performance

2021 ◽  
Vol 13 (17) ◽  
pp. 9969 ◽  
Author(s):  
Tiago Gonçalves ◽  
Cristina Gaio ◽  
André Ferro
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Performance ◽  
Financial Reporting ◽  
The European Union ◽  
Socially Responsible ◽  
Economic Cycles ◽  
Corporate Social ◽  
The Relationship

This study analyses the relationship between earnings management and corporate social responsibility. To this end, we use a sample of 568 listed companies from the European Union between 2010 and 2018. We use discretionary accruals as the measure of earnings management, under the Modified Jones model. Corporate social responsibility is proxied by the Combined Environmental, Social and Governance Score from the ASSET4 database. We find a negative relation between earnings management and corporate social responsibility, suggesting that managers from more socially responsible companies have a more ethical behavior and, thus, financial reporting of higher quality. Additional analysis provides evidence that economic cycles and financial performance play important roles in the relation between earnings management and corporate social responsibility. During periods of crisis or of losses, the relationship is positive, suggesting that under unfavorable economic conditions, management makes opportunistic use of a sustainable company’s status to manage earnings.

Is Earnings Quality Associated with Corporate Social Responsibility?

2012 ◽  
Vol 87 (3) ◽  
pp. 761-796 ◽  
Author(s):  
Yongtae Kim ◽  
Myung Seok Park ◽  
Benson Wier
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Reporting ◽  
Data Availability ◽  
Socially Responsible ◽  
Financial Reports ◽  
Top Executives ◽  
Accruals Quality ◽  
Corporate Social

ABSTRACT This study examines whether socially responsible firms behave differently from other firms in their financial reporting. Specifically, we question whether firms that exhibit corporate social responsibility (CSR) also behave in a responsible manner to constrain earnings management, thereby delivering more transparent and reliable financial information to investors as compared to firms that do not meet the same social criteria. We find that socially responsible firms are less likely (1) to manage earnings through discretionary accruals, (2) to manipulate real operating activities, and (3) to be the subject of SEC investigations, as evidenced by Accounting and Auditing Enforcement Releases against top executives. Our results are robust to (1) controlling for various incentives for CSR and earnings management, (2) considering various CSR dimensions and components, and (3) using alternative proxies for CSR and accruals quality. To the extent that we control for the potential effects of reputation and financial performance, our findings suggest that ethical concerns are likely to drive managers to produce high-quality financial reports. Data Availability: Data used in this study are available from public sources identified in the study.

scholarly journals THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) ON ISLAMIC BANKING PERFORMANCE IN MALAYSIA

2021 ◽  
Vol 3 (8) ◽  
pp. 01-15
Author(s):  
Nur Hanisah Razali ◽  
Nizam Jaafar ◽  
Ismail Ahmad
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Future Research ◽  
Socially Responsible ◽  
Firm Financial Performance ◽  
Effect Regression ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

Corporate Social Responsibility (CSR) activities can lead the company to gain better recognition from citizens and investors. CSR has become one of the added values for a company in increasing competition from global and domestic. However, there are some critics who contend that the CSR benefits surpass the actual cost and some also claim that for the company to be socially responsible is too expensive. Therefore, the objective of this study is to determine the relationship between Corporate Social Responsibility (CSR) impacts on the Islamic Banks' financial performance, specifically in Malaysia. This study used Fixed Effect Regression Model to achieve the objectives of this study. The independent variables used to determine CSR comprise of environment, community, and workplace and marketplace expenditure ratio. Meanwhile, to measure the financial bank performance that is the dependent variable, Return on Asset (ROA) is used in this study. Based on this model, the researcher concluded that CSR’s elements which are environment, community, and marketplace have significant impacts on banks financial performance. This is consistent with Stakeholder Theory which states that the firm financial performance is determined by external stakeholders. In order to enhance the study future research may segregate the focus of the study specifically on Islamic Bank or conventional banking. Future research may also conduct research on the different industries.

Effects of Corporate Social Responsibility on Corporate Financial Performance: A Competitive-Action Perspective

2015 ◽  
Vol 44 (3) ◽  
pp. 1097-1118 ◽  
Author(s):  
Kwang-Ho Kim ◽  
MinChung Kim ◽  
Cuili Qian
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Corporate Financial Performance ◽  
Socially Responsible ◽  
Firm Financial Performance ◽  
Competitive Action ◽  
Using Data ◽  
Corporate Social ◽  
The Relationship

We attempt to provide a more nuanced view of the relationship between corporate social responsibility (CSR) and firm financial performance using a competitive-action perspective. We argue that competitive action should be considered as an important contingency that determines the effects of CSR activities on firm financial performance. Using data for 113 publicly listed U.S. firms in the software industry between 2000 and 2005, we found that socially responsible activities (positive CSR) enhance firm financial performance when the firm’s competitive-action level is high, whereas socially irresponsible activities (negative CSR) actually improve firm financial performance when the competitive-action level is low. By introducing competitive action as an important contingency, this study contributes to the literature on CSR and strategic management.

scholarly journals Doing Good with Creative Accounting? Linking Corporate Social Responsibility to Earnings Management in Market Economy, Country and Business Sector Contexts

2019 ◽  
Vol 11 (17) ◽  
pp. 4568 ◽  
Author(s):  
Mutuc ◽  
Lee ◽  
Tsai
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Earnings Management ◽  
Market Economy ◽  
Financial Reporting ◽  
Corporate Citizenship ◽  
Management Strategies ◽  
Business Sector ◽  
Socially Responsible ◽  
Corporate Social

The mandate of doing good with earnings management has been a subject of inconclusive findings from the past literature and leave issues on the benefits of socially responsible activities and financial reporting of the company. This study investigates the effects of corporate social responsibility (CSR) on accrual-based (AEM) and real-activities earnings management (REM). This study hypothesized that the trade-off exists between these two earnings management strategies, in light of increasing attention of CSR among Asian firms. In addition, this study examines whether the performance of firms in socially responsible activities exhibit different patterns of effect across the two measures of earnings management under the market economy, country, and business sector contexts. This study contemplates on 3906 firm-year observations from 2011 to 2017 of eleven countries in Asia. Our findings show that CSR conceals AEM while it constrains REM. These effects vary according to the market economy classifications, country, and business sector types. Each market, country and business sector has different standpoints in implementing CSR activities and earnings management relevant to the culture, macroeconomic considerations and demands from the stakeholders. Lastly, the discernment on the relevance of building corporate citizenship on financial reporting transparency is elaborated.

IMPLEMENTASI KINERJA KEUANGAN TERHADAP NILAI SPIRITUALITAS PRIBADI

2012 ◽  
Vol 16 (3) ◽  
pp. 332
Author(s):  
Whedy Prasetyo
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Annual Report ◽  
Main Concern ◽  
Good Corporate Governance ◽  
Corporate Social ◽  
The Relationship ◽  
Personal Spirituality

Development of financial performance in the application of Good Corporate Governance and Corporate Social Responsibility which affects the values of honesty private individuals, in order to be able to run the accountability, value for money, fairness in financial management, transparency, control, and free of conflicts of interest (independence). The main concern in this study is focused on achieving value personal spirituality through the financial performance and capabilities of Good Corporate Governance (GCG) and Corporate Social Responsibility (CSR) in moderating the relationship with the financial performance of value personal spirituality. This study is a descriptive verifikatif. The unit of analysis in this study was 15 companies in Indonesia with a policy that has been applied through the concept since January of 2008 until now, with the support of the annual report of the company, the company's financial statements, company reports to the disclosure of Good Corporate Governance and Corporate Social Responsibility in the annual report. Overall reports published successively during the years 2008-2011. The results of this study indicate financial performance affects the value of personal spirituality, and for variable GCG obtained results that could moderate the relationship of financial performance to the value of personal spirituality. But for the disclosure of CSR variables obtained results can’t moderate the relationship with the financial performance of personal spirituality.

Corporate social responsibility and earnings management in the EU: a panel data analysis approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Panagiotis E. Dimitropoulos
Keyword(s):  
Corporate Social Responsibility ◽  
Panel Data ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Reporting ◽  
Negative Association ◽  
Content Type ◽  
Corporate Social ◽  
The Eu

Purpose Over the past decades, corporate social responsibility (CSR) has been considered as a significant corporate strategy and also has been documented as a main information dissemination mechanism of corporations to shareholders, creditors and other external stakeholders. This fact makes the CSR activities and CSR performance interconnected with the quality of firms’ financial reporting. The purpose of this paper is to study the impact of CSR performance on the earnings management (EM) behaviour using a sample from 24 European Union (EU) countries summing up to 121,154 firm-year observations over the period 2003–2018. Design/methodology/approach The study uses a multi-country data set with various dimensions of CSR performance including indexes regarding workforce, community relations, product responsibility and human rights protection. The empirical analysis is conducted with panel data regressions. Findings Evidence supports the negative association between CSR and EM indicating that high CSR performing firms are associated with less income smoothing and discretionary accruals, thus with higher financial reporting quality. Practical implications Regulatory agencies in the EU could use the findings of the study for the improvement of the accounting framework via enhancing the use and publications of social and environmental responsibility information and reports. Social implications Also, the current paper could be of interest not only to academic researchers but also to potential and existing investors in European corporations. The negative association between CSR performance and EM could be used by investors in assessing the risk of firms and the quality and reliability of their financial information. Originality/value This is the first study within the EU, which considers the multi-facet characteristics of CSR on the quality of accounting earnings and offers useful policy implications for regulators and investors.

From corporate social responsibility activities to financial performance: role of innovation and competitive advantage

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahnoor Zahid ◽  
Hina Naeem ◽  
Iqra Aftab ◽  
Sajawal Ali Mughal
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Competitive Advantage ◽  
Manufacturing Firms ◽  
Equation Modeling ◽  
Content Type ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this study is to scrutinize the effect of corporate social responsibility activities (CSRA) of the firm on its financial performance (FP) and analyze the mediating role of innovation and competitive advantage (CA) in the relationship between CSRA and FP in the manufacturing sector of an emerging country, i.e. Pakistan. Design/methodology/approach Data has been collected through an electronic structured questionnaire from 300 middle-level and top-level managers by surveying different manufacturing firms of Gujranwala, Pakistan. The study’s hypotheses have been checked by analyzing the reliability and validity of data and applying confirmatory factor analysis and structural equation modeling through statistical package for the social sciences and analysis of moment structures. Findings Outcomes of this study supported the hypothesized model. It has been found that the CSRA plays a significant positive role in determining the FP of the firm. Furthermore, the CA and innovation have been proved as significant mediators between CSRA and FP. Originality/value The first time examining the intermediation of innovation and CA in the relationship between CSRA and FP is the primary input of this study to the literature. Practically, this study’s findings will help strategy makers of manufacturing firms in emerging countries develop better strategies for implementing CSRA, enhancing innovation, seeking CA and improving FP.

Micro-loans and financial performance: a case of a Chinese commercial bank

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jasmine Alam ◽  
Mustapha Ibn Boamah ◽  
Yuheng Liu
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Design Methodology ◽  
Annual Reports ◽  
Content Type ◽  
Overall Performance ◽  
Corporate Social ◽  
Corporate Social Responsibility Reports ◽  
The Relationship

Purpose This study aims to investigate the relationship between a commercial bank’s micro-loaning activity and overall performance over a 10-year period. Design/methodology/approach Quarterly data was obtained from the Wind Database, China Minsheng Banks’s official annual reports and annual corporate social responsibility reports from 2009 to 2019, to test the linear relationship between micro-loan activities and the overall financial performance of the bank. Findings The results of this study empirically demonstrate that there is a positive relationship between increases in micro-loaning activity and the overall performance of the bank. Some key recommendations for the sector are shared in the conclusion of this paper. Originality/value In the financial sector, some corporate social responsibility activities focus on the issuance of micro-loans. It is unclear, however, if this has also served as a means to increase profitability and overall performance for such institutions.

Sign in / Sign up

Export Citation Format

Share Document