Corporate social responsibility disclosures and earnings management: a bibliometric analysis

Santos-Jaén J.M., León-Gómez A., Serrano-Madrid J.

This review aims to study the knowledge development and research dissemination on the influence of Corporate Social Responsibility (CSR) on earnings management through a social network approach using a bibliometric review. A systematic bibliometric review was carried out on 329 papers obtained from the Clarivate Analytics Web of Science (WoS) Core Collection database. The data were analyzed by year, journal, author, institution, country, affiliation, subject area and term analysis. The results reveal the growing interest of researchers in studying the impact of CSR. Although the USA and China dominate publication production, there are a large number of authors from more than 50 countries around the world. The results also show that being prolific does not imply being influential in this area. The keyword patterns showed some interesting potential areas of study on this topic. The findings of this paper provide insight to the research on the analysis of the influence of CSR on earnings management. The most important findings consist of a number of gaps in the literature, such as gender diversity, voluntary disclosure of information and existence of an audit committee, among others, that allow for future fields of research to improve the analysis of the influence of CSR in EM. This research should also prove helpful to managers, owners and auditors. This is the first bibliometric review developed on this topic and it can be extrapolated to any place in the world.

Donthu N., Kumar S., Mukherjee D., Pandey N., Lim W.M.

Bibliometric analysis is a popular and rigorous method for exploring and analyzing large volumes of scientific data. It enables us to unpack the evolutionary nuances of a specific field, while shedding light on the emerging areas in that field. Yet, its application in business research is relatively new, and in many instances, underdeveloped. Accordingly, we endeavor to present an overview of the bibliometric methodology, with a particular focus on its different techniques, while offering step-by-step guidelines that can be relied upon to rigorously perform bibliometric analysis with confidence. To this end, we also shed light on when and how bibliometric analysis should be used vis-à-vis other similar techniques such as meta-analysis and systematic literature reviews. As a whole, this paper should be a useful resource for gaining insights on the available techniques and procedures for carrying out studies using bibliometric analysis.

Weiland S., Hickmann T., Lederer M., Marquardt J., Schwindenhammer S.

The 2030 Agenda of the United Nations comprises 17 Sustainable Development Goals (SDGs) and 169 sub-targets which serve as a global reference point for the transition to sustainability. The agenda acknowledges that different issues such as poverty, hunger, health, education, gender equality, environmental degradation, among others, are intertwined and can therefore only be addressed together. Implementing the SDGs as an ‘indivisible whole’ represents the actual litmus test for the success of the 2030 Agenda. The main challenge is accomplishing a more integrated approach to sustainable development that encompasses new governance frameworks for enabling and managing systemic transformations. This thematic issue addresses the question whether and how the SDGs set off processes of societal transformation, for which cooperation between state and non-state actors at all political levels (global, regional, national, sub-national), in different societal spheres (politics, society, and economy), and across various sectors (energy, transportation, food, etc.) are indispensable. In this editorial, we first introduce the 2030 Agenda and the SDGs by providing an overview of the architecture of the agenda and the key challenges of the current implementation phase. In a second step, we present the eleven contributions that make up the thematic issue clustering them around three themes: integration, governance challenges, and implementation.

Zhang Z., Yap T.L., Park J.

We examine whether Chinese firms with better voluntary corporate social responsibility (CSR) disclosure and CSR performance engage in earnings management in their financial reporting. Our results show that Chinese firms with better voluntary CSR disclosure are more likely to engage in earnings management through discretionary accruals and less likely to engage in earnings management through real activities manipulation, while Chinese firms with better CSR performance are more likely to engage in earnings management through real activities manipulation and are less likely to engage in earnings management through discretionary accruals. Our evidence shows that consistent with opportunistic theory, the Chinese firms’ engagement in CSR practices is based on opportunistic incentives, and voluntary CSR disclosure and CSR performance are being used by these firms as window-dressing tools for earnings management that infringes on the benefits of firm stakeholders.

Rezaee Z., Dou H., Zhang H.

We examine the association between corporate social responsibility (CSR) and earnings quality using CSR ranking data from Rankins (RKS) and four measures of earnings quality. Using a sample of 2580 Chinese listed firms for fiscal years 2009–2015, with 14,807 firm-year observations, we find that CSR firms and those with higher CSR ratings are less likely to engage in earnings management than non-CSR firms and those with lower CSR ratings, and their earnings are more persistent and more accurately predict future cash flows from operations. State ownership and marketization moderate the relationship between CSR disclosures and earnings quality.

Bhatt Y., Ghuman K., Dhir A.

Businesses have practiced and examined lean and green manufacturing principles for the last 25 years, but the sustainability challenges that we face today are still significantly potent. This context creates a need to critically examine the research and practice in this domain to determine the gaps and propose solutions. To achieve that, we applied a two-tier analysis constituting bibliometric and content analyses for developing the intellectual structure of sustainable manufacturing (SM) literature. The study also produced a comprehensive framework to provide a granular understanding of SM literature. The framework demonstrates different paradigms of SM literature as well as the conceptual and methodological advancement of the research frontiers in the domain. The outcomes of the research comprise implications for researchers, managers, and policymakers. The study concludes that most empirical work focuses on the relationship of lean and green practices with organizational and environmental performance, but the role and criticality of sustainability are significantly underrepresented in SM literature. Based on our findings, we call for the integration of sustainability principles, that is, sustainable development goals (SDGs), circular economy, life cycle engineering, and corporate sustainability assessment with SM research. • Employs bibliometric and content analyses for developing the intellectual structure of the field. • Identifies six research paradigms in the prior sustainable manufacturing literature. • Delineates the dominant logic, emphasis and limitations of each of the six paradigms. • Develops a comprehensive framework for a granular understanding of the research in the domain. • Provides the gaps and limitations of prior literature and recommendations for future research.

Tseng M., Chang C., Lin C.R., Wu K., Chen Q., Xia L., Xue B.

This study conducts a comprehensive literature review of articles on the triple bottom line (TBL) published from January 1997 to September 2018 to provide significant insights and support to guide further discussion. There were three booms in TBL publications, occurring in 2003, 2011, and 2015, and many articles attempt to address the issue of sustainability by employing the TBL. This literature analysis includes 720, 132, and 58 articles from the Web of Science (WOS), Inspec, and Scopus databases, respectively, and reveals the gaps in existing research. To discover the barriers and points of overlap, these articles are categorized into six aspects of the TBL: economic, environmental, social, operations, technology, and engineering. Examining the top 3 journals in terms of published articles on each aspect reveals the research trends and gaps. The findings provide solid evidence confirming the argument that the TBL as currently defined is insufficient to cover the entire concept of sustainability. The social and engineering aspects still require more discussion to support the linkage of the TBL and to reinforce its theoretical basis. Additionally, to discover the gaps in the data sources, theories applied, methods adopted, and types of contributions, this article summarizes 82 highly cited articles covering each aspect. This article offers theoretical insights by identifying the top contributing countries, institutions, authors, keyword networks, and authorship networks to encourage scholars to push the current discussion further forward, and it provides practical insights to bridge the gap between theory and practice for enhancing the efficiency and effectiveness of improvements.

HUYNH Q.L.

Shams S., Sohel Rana M., Parvin R.

This paper aims to give an overview of the existing literature on the Earnings Management (EM) and Corporate Social Responsibility (CSR) relationship in different countries. This paper reviews preceding studies concerned about EM, CSR and their relationship. Out of 23 works of literature, 11 studies found a negative relationship, 6 studies found a positive relationship, 2 studies found blended relationships in case of different situations and 4 studies found no connection between CSR and EM. Most of the results demonstrated that probably the socially responsible organizations have a negative correlation with EM practice. The types of the relationship depend on cause-effect relationship, information asymmetry, how can a company use resources, awareness on environmental issues, awareness on ethical issues, tax avoidance tendency, corporate governance practice, nature of the firm, political environment, opportunistic incentive, and stakeholder capital, manager's psychology, etc. Relationships between EM and CSR influence on earnings quality, firm performance, and firm value. 

Prashar A., Sunder M V.

Research on sustainability or sustainable development has emerged significantly over the past two decades, evidenced by an increasing interest and publication momentum by academic scholars. Given the importance of small and medium sized enterprises (SMEs), that constitute ∼99% of all firms, this paper adopts a three-stage systematic review protocol to present a state of art literature review on sustainable development in SMEs. Four different analysis-synthesis approaches (bibliometric analysis, methodological analysis, qualitative content analysis, and logical reasoning of authors) were used on the literature data of 117 relevant papers (from 37 journals) identified from mainstream academic databases. This review provides insights not previously fully captured or evaluated by other reviews on this topic. The findings provide several implications on the current state of literature on sustainable development in SMEs, leading to research gaps and directions for future research. The findings provide a robust roadmap for further investigation in this field.

Kumala R., Siregar S.V.

PurposeThis paper aims to examine the association of corporate social responsibility (CSR), family ownership and earnings management.Design/methodology/approachThe authors specifically examine mining companies listed in Indonesia Stock Exchange during 2012-2014. Total observations are 105 firm-years. Research data are collected from sustainability reports, annual reports and annual financial statements. Data are analysed using panel data regression.FindingsThe evidence suggests a negative association between corporate social responsibility disclosures (CSRDs) and earnings management. The authors also examine the direct and moderating role of family ownership. The authors find a positive association between family ownership and earnings management. In addition, family ownership strengthens the negative association between CSR and earnings management.Research limitations/implicationsThis research only examines mining companies listed in Indonesia Stock Exchange, which limit the generalisation of the results.Practical implicationsThe results should useful for: investors wishing to use the level of CSRD as an indicator of firm ethics, especially in relation to family-owned firms; capital-market regulators wishing to improve market transparency by introducing requirements to encourage more CSRD; and other users of financial statements, especially financial analysts to consider ownership structure, specifically family ownership.Originality/valuePrevious studies have mainly focussed on companies in the USA. This paper adds to the body of knowledge regarding whether the positive relationship between family ownership and CSR is also present outside the USA, especially in emerging countries. Further, this study examines the effect of family ownership on the association of CSR and earnings management, which rarely examined in previous studies.

Velte P.

This paper provides insight to whether Corporate Social Responsibility (CSR) and earnings management are connected. Based on the agency- and stewardship theory the author conducts a literature review and evaluates the empirical results with regard to the CSR-earnings management and the earnings management-CSR link. In this context, CSR reporting and CSR performance are focused as CSR measures. The results of the 33 studies indicate that the majority of the research relies on the CSR-earnings management link, on the US-American capital market and on CSR performance measures. Most of these studies indicate that CSR relates to decreased earnings management in line with the stewardship theory. However, also other results exist on the CSR earnings management link. Research on the earnings management-CSR relationship is of low validity so far in view of the low amount. Comparability of recent research on that topic is in particular limited in view of the heterogeneous CSR and earnings management variables and the endogeneity concerns. Future research is encouraged to address endogeneity tests, include country-specific effects and increase the validity of CSR and earnings management variables. As CSR performance and reporting can have a major impact on earnings quality, the author recommends firms to search for opportunities to make their CSR activities more comprehensive by expanding their CSR reporting and thus providing deeper insights on their CSR performance in line with stakeholders’ interests. The paper is the first literature review on the CSR-earnings management and earnings management-CSR relationship so far. The author explains the main CSR and earnings management variables that have been included in prior empirical research, stresses the limitations of the studies and gives useful recommendations for future research, practice and regulators

Jouber H.

PurposeThis paper aims to examine whether corporate social responsibility (CSR) is associated with firms’ earnings quality (EQ) and how this association is context-specific. The authors consider specific institutional differences in strength of corporate governance (CG) attributes, quality of law enforcement and level of investor protection found between Anglo-American, European and South-Eastern Asian CG models to test the impact of above country-level factors on this association.Design/methodology/approachTo test the association between CSR and EQ, the authors consider EIRIS (Ethical Investment Research Service) (2018) CSR issues of sustainability indicators as proxy to capture CSR. Following Rezaee and Tuo’s (2019) study, the authors classify EQ into innate earnings quality (IEQ) and discretionary earnings quality (DEQ). The authors investigate the innate (discretionary) EQ as to refer to firm’s inherent operating uncertainty (earnings management). Several dependency models for panel data applying the generalized method of moment (GMM) estimator of Arellano and Bond (1991) are ruled based on archival data of 4,206 non-financial international listed firms over the period 2012-2017.FindingsUnivariate and GMM multivariate cross-country analyses show that CSR is positively associated with EQ and that this association is more pronounced for firms within countries where good CG tools and higher investor right protection are preserved. The authors interpret the findings as evidence that the CSR-EQ association is shaped by the degree of monitoring role played by institutional features at the country level. The results are robust to a battery of robustness tests.Originality/valueThe originality of this research is twice. On the one hand, it examines whether CSR is a reflection of manager’s ethical opportunistic behavior resultant on earnings quality derived from a firm’s innate traits. On the second hand, it tests whether CSR is a reflection of discretionary earnings quality manifested by earnings management behavior. This paper is the first to support that institutional features significantly matter when investigating the association between CSR and EQ.

Nwagbara U., Belal A.

Purpose The purpose of this paper is to investigate how language (choice) in CSR reports of leading oil companies in Nigeria is used to portray an image of “responsible organisation”. Design/methodology/approach This paper draws insights from communication studies (persuasion theory) and critical discourse analysis (CDA) studies to discursively unpack all those subtle and visible, yet equally invisible, linguistic strategies (micro-level elements): wording (single words), phrases and chains of words (clauses/sentences). These linguistic strategies (micro-level elements) proxy organisational discourses (meso-level elements), which are reflective of wider social practices (macro-level elements). The authors base the investigation on CSR reports of six leading oil companies in Nigeria from 2009 to 2012. Findings The findings of this study reveal that (leading) Nigerian oil companies linguistically use CSR reports to persuasively construct and portray the image of “responsible organisation” in the eyes of wider stakeholders (the communities) despite serious criticism of their corporate (ir) responsibility. Originality/value As opposed to the previous content analysis based studies, this paper contributes to the emerging stream of CDA studies on CSR reporting by providing a finer-grained linguistic analytical schema couched in Fairclough’s (2003) approach to CDA (and persuasion theory). This helps to unravel how persuasive language/discourse of responsible organisation is enacted and reproduced. The authors thus respond to the calls for theoretical plurality in CSR reporting research by introducing persuasion theory from communication studies literature which has hitherto been rarely applied.

Mohmed A., Flynn A., Grey C.

PurposeThe purpose of this paper is to investigate the relationship between corporate social responsibility (CSR) and earnings quality, as proxied by accrual earnings management, in Egyptian firms. This research is conducted in a bidirectional fashion using simultaneous equations and considers two theoretical perspectives.Design/methodology/approachThe study employs CSR annual scores from the Egyptian environmental, social and governance index (S&P/ESG index) for the 100 highest scoring firms from 2007 to 2015. It utilizes three earnings quality measures, in addition to considering reverse causality and endogeneity.FindingsThe results indicate that CSR has a positive association with earnings quality only in the top CSR scoring firms (top 30 ranked firms according to the index). Engaging in CSR in such firms enhances the quality of their earnings. This suggests that firms with relatively lower CSR scores (bottom 70 ranked firms according to the index) may use CSR to “greenwash” weaker earnings.Research limitations/implicationsThe findings suggest that researchers, analysts and policy makers should consider earnings quality when estimating the real value of a firm’s CSR score. In particular, the Egyptian S&P/ESG index committee could further develop the index by incorporating earnings quality measures.Originality/valueThe study contributes to the literature by exploring in-depth the causal relationship between CSR practices and accrual earnings management in an emerging market. The results provide a nuanced story of CSR practices, with accruals earnings management (earnings quality) acting as a mediator of CSR’s inherent value.

Khatri I.

Purpose Acknowledging the scarce literature examining the effect of non-financial disclosure regulation on earnings management (EM), this study aims to investigate whether the narrative reporting regulation prompts or prevents EM. Design/methodology/approach This study uses the difference-in-differences research design using the UK narrative reporting regulation 2013 as an exogenous shock. The sample comprises of 417 firms, incorporating both treated firms listed on the London Stock Exchange and control firms from STOXX600 Europe during the period from 2010 to 2016. Findings The results indicate that, following the implementation of the UK narrative reporting regulation, treated firms exhibited an increase in EM compared to control firms. Furthermore, the study findings reveal a preference among firms for conservative EM practices, as opposed to engaging in aggressive strategies. Drawing on the political cost hypothesis, the results suggest that managers were motivated to downwardly adjust their reported earnings in response to regulatory pressures, particularly those stemming from political costs and uncertainty associated with the narrative reporting regulation. Practical implications In particular, the author recommends that regulations concerning both financial and non-financial disclosures should be interconnected, ensuring that subsequent disclosures offer a comprehensive and precise representation of the firm’s performance. Originality/value Through this analysis, the author offers policy-relevant insights that can be valuable for policymakers and regulators in shaping effective regulations in this domain.

Abraham M., Kumar S.S.

PurposeThe present article aims at systematizing the literature on EM that spans over three decades (1987–2023) to analyze the growth and development in the EM research following changes in reporting standards, economic conditions and legislations over the period.Design/methodology/approachThe study covers 3,742 articles on earnings management (EM) indexed in SCOPUS and the Web of Science databases from 1987 to 2023. The study aims at the systematization of bibliometric data using R Studio, Biblioshiny and VOS Viewer software.FindingsThe study reveals that the research in the pre-SOX era gave more thrust to the development of cross-sectional models for the detection of accrual EM proxies, whereas research on EM had shifted to managerial discretions based on real transactions in the post-SOX era. Later, in the post-GFC era, the focus of EM research was redefined towards investor protection due to the collapse of the global economy that led to the erosion of investors’ wealth. In the modern era, research on EM focuses on ethical aspects such as CSR compliance, ESG framework and so on.Practical implicationsThe findings of the study will aid the policymakers in addressing the EM based on real transactions and also incorporate the variations and changes in multiple green reporting standards to ensure fairness and transparency in reported figures.Originality/valueThe study contributes to the existing literature by quadrisecting the entire research on earnings management to analyze the growth and development in EM research and makes novel suggestions that future research on earnings management can be expanded towards the role of non-financial disclosure in managerial discretions and also the insider biases in green reporting.

Bel‐Oms I.

AbstractThe environmental, social and governance (ESG) controversies, defined as a bad behavior which calling into question the commitment to the firm under the media and capture the attention of investors causing conflicts with sustainable business practices, has received increasing attention from academics of several fields. A literature review methodology is used to reviews articles selected from the Scopus and Web of Science databases from 2018 to 2024. Using the Preferred Reporting Items for Systematic Reviews and Meta‐Analyses (PRISMA) guidelines and the bibliometric techniques, with the goal of mapping the intellectual landscape of the field and indicating the key issues shaping its current development. This paper is to conduct quantitative bibliometric analysis with several research factors, such as authors, citations, journals, countries, and regions, using techniques with improve the visualization of bibliometric analysis. Furthermore, this review provides a conceptual framework of the ESG controversies to obtain their drivers and reveal the consequences companies face after ESG controversies. This manuscript concludes by discussing implications of the literature analysis and providing some opportunities for future research. This research provides to the understanding of the ESG controversies context and shows insights for future lines of research.

Velte P.

AbstractThe link between corporate social responsibility (CSR) and earnings management represents an attractive empirical research topic in recent years. In view of the heterogeneous research results, the purpose of this structured literature review is to analyze the contextual factors of this complex relationship. We selected 107 quantitative peer‐reviewed archival studies on that topic and explain a possible positive and negative link between CSR and earnings management by the moral licensing hypothesis (principal agent theory) and the moral track hypothesis (stakeholder theory). We focus on firm‐ and country‐related moderator effects as contextual factors. Country‐specific studies are separated in developed (Anglo‐American and Continental European settings) and developing countries (African and Asian settings), code and case law regimes as well as the degree of shareholder protection and legal enforcement. In line with stakeholder theory, we stress that most of the included studies found a negative impact of CSR on earnings management with a focus on CSR performance and accruals‐based earnings management. Other measures, for example, CSR reporting, sub‐pillars of CSR performance, and real earnings management, are inconclusive due to reduced research activity. We do not find any structural changes between developed and developing countries, case and code law regimes, and regarding the strength of shareholder protection and legal enforcement. However, there are clear indications that corporate and country governance strengthens (weakens) the negative (positive) influence of CSR on earnings management. We stress major limitations of prior research and formulate useful recommendations for future research.

Ellili N.O.

This study aims to identify current topics in the corporate governance literature by conducting a bibliometric review of corporate governance bibliometric reviews published in the Scopus database. It applies different bibliometric analyses, including keyword cartography, authors’ citations, countries’ citations, organizations’ citations, documents’ citations, references’ citations, and journal citations. In addition, it applies evolution and content analyses. It reviewed 87 bibliometric reviews of corporate governance published in Scopus. VOSviewer was used as software for conducting bibliometric analysis, whereas author used CiteSpace and WordStat software for evolution and content analyses. The results identified four major clusters: (1) private equity, (2) corporate social responsibility, (3) gender diversity, and (4) sustainability. In addition, the results reveal that journals on Corporate Social Responsibility and Environmental Management, Management Review Quarterly, and Meditari Accountancy Research contribute to bibliometric reviews of corporate governance in terms of number of papers and citations. This study provides recommendations for future research in this area. This study has implications for bibliometric reviews of corporate governance topics such as corporate governance in specific legal and industrial contexts, ownership structure, attributes of the board of directors, and different financial decisions. This is the first study to review bibliometric analyses of corporate governance topics. These results will be useful in future bibliometric reviews of corporate governance. This study presents an overview of the bibliometric review development of corporate governance and a summary of the most productive authors, organizations, journal sources, and references. It also provides potential research opportunities for future bibliometric reviews of corporate governance topics.

Mishra P., Sharma A., Rabbani M.R., Khan A., Kumar S.

Purpose Financial and nonfinancial disclosures (sustainable accounting) are crucial in the annual financial reports of many firms. This study aims to explore the dynamic relationship between sustainability disclosure quality (SDQ) and financial performance (FP) within mandatory disclosure frameworks. SDQ is evaluated across six dimensions, encompassing both the quality and quantity of disclosures, aiming to understand their reciprocal influence. Design/methodology/approach Using the generalized method of moments (GMM), this research analyzes data from 2013 to 2019, focusing on 99 listed Indian firms within the S&P Bombay stock exchange (BSE) 500 index. The study uses rigorous measurement criteria to assess SDQ and uses statistical methods to unveil the causal link between SDQ and FP. Findings The results show a positive causal connection between SDQ and FP, where organizations with good FP make relatively higher disclosures across FP proxies than their counterparts. Additionally, the study investigates the impact of research and development (R&D) expenditure and dividend payments (DIVD) on SDQ. Notably, lower R&D spending is associated with higher quality SDs, and companies with superior SDQ exhibit increased DIVD. Practical implications The findings advocate for strengthened regulatory compliance, incentivized sustainable practices and heightened reporting standards for a transparent business environment and achieving the relevant United Nations Sustainable Development Goals. Originality/value This research contributes original insights by uncovering the intricate relationship between SDQ and FP, shedding light on the impact of R&D expenditure and DIVD on SDQ. These findings contribute to a nuanced understanding of the interplay between FP and sustainability reporting within the context of mandatory disclosure frameworks.

Ali K., Arslan H.M., Mubeen M., Azeem H., Zhen-Yu Z., Yushi J., Miao M.

This study meticulously reviews the intricate relationship between sustainability disclosures and earnings management, exploring contextual dimensions that satisfy the internal (ownership structure and corporate governance) and external stakeholders’ concerns (information asymmetry, transparency, corporate reputation). Furthermore, the study also review the impact of carbon disclosures on earnings management in the context of gender diversity. Lastly, the research reviews the effects of sustainability on real, accrual, and discretionary accrual earnings management, shedding light on firms’ preferences for specific types of earnings management practices. A systematic review method is accepted to carefully examine these dynamics, demanding a meticulous search of pertinent literature through Scopus while adhering to stringent inclusion criteria. This comprehensive process yields a curated selection of 145 studies in the English language published from 2008 to 2023, establishing a robust foundation for this review and formulating a map for the knowledge produced and disseminated in preceding examinations. The impact of this research is underscored by its contribution to advancing understanding across several measurements. The results significantly enhance understanding of how sustainability effects various facets of earnings management, offering a comprehensive framework for future research propositions. Moreover, the study extends organized and stakeholder theories, providing pronouncement support for entities in their sustainability and earnings management approach. The findings have practical implications, assisting practitioners and researchers in exactly interpreting the interplay between sustainability and financial practices. This research is a seminal contribution to the field, comprehensively exploring the intricate relationships between sustainability, earnings management, and their multifaceted influences. It is an invaluable resource for scholars, policymakers, and practitioners, fostering a deeper understanding of the evolving landscape where sustainability and financial practices intersect.

Deng Y., Ong T.S., Senik R.

AbstractResearch QuestionThis study seeks to examine and synthesize the extant literature to summarize whether the essence of corporate social responsibility (CSR) genuinely stems from an authentic social commitment, or if it primarily serves as a tactic to obscure earnings management (EM) practices.Research MethodologyA systematic literature review methodology is employed to thoroughly assess 75 articles selected from the Web of Science and Scopus databases, integrating bibliometric techniques, and following the Preferred Reporting Items for Systematic Reviews and Meta‐Analyses (PRISMA) guidelines.Research FindingsAmid evolving economic and social landscapes, the research of the CSR‐EM relationship increases, particularly in Asian contexts. Further research found that ESG (environmental, social, and governance) was gradually introduced into the theoretical framework of CSR‐EM. However, most of the research does not study the impact of the three dimensions of ESG, respectively. The study concludes the four varied CSR‐EM relationships: positive, negative, mixed (depending on EM type), and no correlation, and suggests that this should be determined by both macro (e.g., political and economic environment) and micro determinants (e.g., industries and governance). Therefore, the CSR‐EM relationship cannot be simply generalized. At present, most studies study CSR as a whole, and some literature uses CSR disclosure and performance to measure CSR respectively. However, distinctions between CSR disclosure and performance, namely CSR decoupling, remain underexplored.Theoretical and Practical ImplicationsThis review synthesizes four key findings and summarizes seven relevant theories from existing literature, thus enriching the theoretical contributions of CSR‐EM research. It underscores the significance of both macro and micro factors on the CSR‐EM relationship, introduces the concept of CSR decoupling, and outlines directions for future studies. The review offers insights for policymakers on CSR‐EM dynamics and suggests strategies for companies to enhance CSR practices and reporting consistency.

Bui T.H.

Velte P.

This study addresses the relationship between corporate biodiversity reporting (CBR) and earnings management as well as the moderating impact of board gender diversity (BGD). Due to increased regulatory pressure, we relied on a sample of STOXX Europe 600 firms (1,537 firm-year observations) for the business years 2017–2021. In line with the moral licensing hypothesis, we assume that CBR and our two main proxies of earnings management (accruals-based and real earnings management) are positively related, and a critical mass of female directors may weaken this link. Our regression results align with these assumptions and prior research on similar relationships. Moreover, we conduct several endogeneity checks, which support our main results. This study mainly contributes to prior research as it is the first one on the link between CBR and earnings management. We stress major implications for researchers, standard setters, and business practitioners. Biodiversity represents a key sub-pillar of sustainability reporting with an impact on financial reporting, indicating the need for integrated thinking, which should be promoted in future empirical research.

Yasar A., Yalçın N.

Bansal M.

The study examines the relationship between corporate social responsibility (CSR) and earnings management strategies (expense shifting and revenue shifting). Based on the sample of 41,100 Bombay Stock Exchange listed firm-years spanning over fourteen years (2009–2022), we find that CSR-oriented firms prefer revenue shifting over expense shifting for core earnings management, and this effect is more pronounced among government CSR firms (firms spending on government-related sectors). Our subsequent tests exhibit the differential impact of earnings management strategies on stock return, where investors are found to perceive expense shifting as riskier than revenue shifting, which in turn, is likely to incentivize CSR firms to prefer revenue shifting for core earnings management. Our findings alert auditors about suspected firms (CSR and government CSR firms) that inflate core earnings through shifting practices and highlight the market arbitrage opportunity (mispricing) for investors, where abnormal returns can be fetched by making a zero-investment strategy in expense and revenue shifter stocks. The study is among the pioneering attempts to document the substitution relationship between earnings management strategies in CSR firms and provide empirical evidence on the pricing impact of these strategies. Our findings are robust to the problem of endogeneity and self-selection bias.

Zavyalova E.B., Volokhina V.A., Troyanskaya M.A., Dubova Y.I.

AbstractThis paper aims to develop a humanistic model of corporate social responsibility in e-commerce, relying on high technology in an artificial intelligence economy. The research is based on the experience of the top 30 publicly traded e-commerce companies, the 16 most responsible companies in the retail industry in the USA, and the leading global and Russian e-commerce business structures in 2020–2021. Based on econometric modeling, it is substantiated that the humanization (qualitative criterion) of jobs provides an increase in revenues of e-commerce businesses to a greater extent than an increase in the number (quantitative criterion) of jobs. The high technology of the artificial intelligence economy (AI economy) makes it possible to maximize the contribution of responsible HRM of the e-commerce business in increasing its revenues. For this purpose, a humanistic model of corporate social responsibility in e-commerce based on high technology in the AI economy has been developed. The theoretical significance lies in proving the need to humanize jobs in e-commerce and revealing the essence of this process. The practical significance lies in the fact that the developed humanistic model will increase the profitability and, consequently, the resilience of businesses to future economic crises that arise against the backdrop of the COVID-19 pandemic.