The effect of corporate social responsibility practices on real earnings management: evidence from a European ESG data

Yamina Chouaibi () and Ghazi Zouari ()
Additional contact information
Yamina Chouaibi: University of Sfax
Ghazi Zouari: University of Sfax

International Journal of Disclosure and Governance, 2022, vol. 19, issue 1, No 2, 30 pages

Abstract: Abstract The new trend in the ranking of companies, not only in financial terms but also according to their commitment to ethics and corporate social responsibility (CSR), is explained by the importance of responsible investment and responsible governance criteria in the decision making of the shareholders and other investors. These new business evaluation criteria have attracted the attention of several stakeholders, such as investors, financial analysts, researchers, and also specialized media, that require quality information based on this social and ethical approach. The aim of this article is to examine the link between corporate social responsibility practices and the level of real earnings management (REM) of a sample firms belonging ESG index from five European countries. The variables related to the ethical behavior of companies have a statistically significant and negative relationship with the level of real earnings management. Indeed, the more important the socially responsible and ethical practices are, the less the company engages in an aggressive REM strategy. Thus, the integration of new dimensions in the explanation and determination of the REM is under-explored. The explanation of the quality of the results by ethical or social variables makes it possible to overcome the criticisms addressed to the contractual approaches of companies.

Keywords: Corporate social responsibility; Ethical behavior; Real earnings management; Executive incentive compensation; Environmental; social and governance (ESG) (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://link.springer.com/10.1057/s41310-021-00125-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:ijodag:v:19:y:2022:i:1:d:10.1057_s41310-021-00125-1

Ordering information: This journal article can be ordered from
https://www.palgrave.com/gp/journal/41310

DOI: 10.1057/s41310-021-00125-1

Access Statistics for this article

International Journal of Disclosure and Governance is currently edited by Michael Alles

More articles in International Journal of Disclosure and Governance from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().