Corporate Social Responsibility, Culture and Earnings Management
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2017-07-07
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en
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Abstract
This study examines whether corporate social responsibility (CSR) is related to earnings management and if culture, defined as masculine or feminine, is related to CSR and earnings management. A moderating effect is expected, suggesting that CSR firms in feminine countries are less likely to engage in earnings management than CSR firms in masculine countries. Besides that, a mediating effect is expected, in which firms in feminine countries focus more on CSR and are hence less likely to engage in earnings management compared to firms in masculine countries. The findings show that firms in masculine countries are more likely to engage in real earnings management compared to firms in feminine countries. This influence cannot be found for accrual-based earnings management. Neither a significant relation between CSR and total earnings management nor a mediating or a moderating effect between CSR, culture and earnings management is found. The results are robust to several additional tests. The insignificance of the results might be explained by the sample, which does not distinguish between firms that use CSR transparently and firms that use CSR opportunistically. More elaboration is needed regarding which firms use CSR opportunistically and which firms use CSR transparently.
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Faculteit der Managementwetenschappen