 Corporate social responsibility and operating cash flows management: An examination of credit market incentivesHyung Il Oh, Hyunpyo Kim, Jeong‐Bon Kim and Yong Gyu Lee Journal of Business Finance & Accounting, 2021, vol. 48, issue 7-8, 1494-1522 Abstract: This paper examines whether firms that engage in corporate social responsibility activities (CSR firms) manage reported cash flows from operations (CFO) when they have strong credit market incentives. We find that CSR firms near financial distress and those having a long‐term credit rating near the investment/non‐investment grade cutoff are more likely to inflate reported CFO, compared to all other firms. We also find evidence that CSR firms with these credit market incentives appear to resort mainly to classification rather than timing as a tool for managing CFO. Further, we find that the degree of CFO management performed by those CSR firms is more pronounced under weaker corporate governance. Overall, our findings suggest that CSR firms with stronger credit market incentives are more likely to manage CFO, and that such CFO management behavior is likely to be implemented at the expense of shareholders’ interest. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:48:y:2021:i:7-8:p:1494-1522 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker More articles in Journal of Business Finance & Accounting from Wiley Blackwell |
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