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Do female and independent directors explain the two-way relationship between corporate social responsibility and earnings management of Chinese listed firms?

Do female and independent directors explain the two-way relationship between corporate social... PurposeThis study aims to explore the possibility of a two-way relationship between corporate social responsibility (CSR) and earnings management (accruals and real EM) with the moderating role of female and independent directors.Design/methodology/approachThe authors use STATA to test the generalized method of moments on a sample of Chinese listed firms data over the period 2009-2015. The unbalanced sample obtained 3,481 observations from China stock market and accounting research database and CSR rating provided by Rankins.FindingsThe results indicate a significant negative relationship between two-way CSR and accrual-based EM. Moreover, female and independent directors moderate the two-way relationship between CSR and EM.Research limitations/implicationsThe present study does not include all financial, insurance and investment firms to impact on CSR and EM. Further research might consist of family ownership to enhance the evidence for an emerging market.Originality/valueThis study primarily contributes to the literature on CSR, female and independent directors, and EM by providing evidence for the moderating role of female and independent directors on the two-way association between CSR and EM. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Accounting and Information Management Emerald Publishing

Do female and independent directors explain the two-way relationship between corporate social responsibility and earnings management of Chinese listed firms?

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1834-7649
DOI
10.1108/IJAIM-03-2018-0027
Publisher site
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Abstract

PurposeThis study aims to explore the possibility of a two-way relationship between corporate social responsibility (CSR) and earnings management (accruals and real EM) with the moderating role of female and independent directors.Design/methodology/approachThe authors use STATA to test the generalized method of moments on a sample of Chinese listed firms data over the period 2009-2015. The unbalanced sample obtained 3,481 observations from China stock market and accounting research database and CSR rating provided by Rankins.FindingsThe results indicate a significant negative relationship between two-way CSR and accrual-based EM. Moreover, female and independent directors moderate the two-way relationship between CSR and EM.Research limitations/implicationsThe present study does not include all financial, insurance and investment firms to impact on CSR and EM. Further research might consist of family ownership to enhance the evidence for an emerging market.Originality/valueThis study primarily contributes to the literature on CSR, female and independent directors, and EM by providing evidence for the moderating role of female and independent directors on the two-way association between CSR and EM.

Journal

International Journal of Accounting and Information Management – Emerald Publishing

Published: Aug 5, 2019

References

  • Internal organisational factors influencing corporate social and ethical reporting: beyond current theorising
  • Sustainability in businesses, corporate social responsibility, and accounting standards: an empirical study
  • Corporate governance and CEO pay: evidence from UK travel and leisure listed firms
  • Determinants of social and economic reportings: evidence from Australia, the UK and South African multinational enterprises
  • Silence are not golden: corporate governance standards, transparency, and performance
  • Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations