Moderating Role of ESG Reporting in the Association between Green Innovation and Earnings Management in MENA Energy Firms

Aiman Abu Hamour (), Ahmad Ali Salem Bawaneh (), Khaled M.K. Alhyasat (), Nour Hussien Yousef AlRahamneh () and Eman Kamel Aburmman ()
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Aiman Abu Hamour: Department of Accounting and Accounting Information Systems, Amman University College, Al-Balqa Applied University, Amman, Jordan,
Ahmad Ali Salem Bawaneh: Al-Balqa Applied University, Amman, Jordan,
Khaled M.K. Alhyasat: Military College, Abu Dhabi University, Abu Dhabi, UAE,
Nour Hussien Yousef AlRahamneh: Ajloun National University, Ajloun, Jordan,
Eman Kamel Aburmman: Arab University College of Technology, Amman, Jordan.

International Journal of Energy Economics and Policy, 2026, vol. 16, issue 2, 434-447

Abstract: This research investigates the impact of green innovation (Gre-inn) on earnings management (EM) in MENA energy companies, taking into account, moderating effect of integrated ESG reporting (ESGC). Based on a sample of 1,747 firm-year observations from the period 2008-2024 results indicate that there is a positive and significant relationship between environmental innovation (Gre-inn) and EM, which implies that environment-driven innovations-triggered by regional clean-energy transitions-can be strategically employed to mold reported performance. ESGC also has a weakly positive effect on EM and reinforces the Gre-inn-EM relationship, suggesting that transparent sustainability disclosure enhances managers' discretion in managing earnings. Robustness tests validate the findings. These findings are critical for developing MENA economies as both significant reforms and renewable projects along with evolving reporting frameworks are transforming the energy sector.

Keywords: Green Innovation; Earnings Management; ESG Reporting; MENA Energy Sector (search for similar items in EconPapers)
Date: 2026
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DOI: 10.32479/ijeep.22158

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