Managerial entrenchment, corporate social responsibility, and earnings management

Isabel-Maria García-Sánchez, Nazim Hussain*, Sana Khan, Jennifer Martínez-Ferrero

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

29 Citaten (Scopus)
120 Downloads (Pure)

Samenvatting

Many studies have examined the direct relationship between the two corporate practices: corporate social responsibility (CSR) and earnings management (EM); however, the results remain heterogeneous. To achieve the consensus, this study builds upon the classical agency theory and examines the role of managerial entrenchment in creating organizational facades related to CSR and EM. More specifically, it examines the relationship between CSR performance and EM in the presence of managerial entrenchment and the direct effect of managerial entrenchment on CSR decoupling. In doing so, this article provides evidence of a previously underappreciated yet fundamentally important aspect, that is, managerial entrenchment, that may significantly affect the quality of earnings as well as the level of alignment between CSR disclosure and performance. Our analyses of longitudinal data of an international sample for the period of 2007-2016 supports that managerial entrenchment significantly moderates the relationship between CSR performance and EM. Furthermore, our study reveals that entrenched managers decouple CSR disclosure and performance.

Originele taal-2English
Pagina's (van-tot)1818-1833
Aantal pagina's16
TijdschriftCorporate Social Responsibility and Environmental Management
Volume27
Nummer van het tijdschrift4
Vroegere onlinedatum5-mrt.-2020
DOI's
StatusPublished - jul.-2020

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