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Environmental and Social Policy and Earning Persistence

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  • Lassaad Ben Mahjoub
  • Halioui Khamoussi

Abstract

In recent years, the effect of disclosure on environmental and social information has been the subject of much research in an Anglo‐Saxon context. The European field, and especially the French companies, have not been sufficiently discussed. In this paper, we investigate the relationship between social and environmental disclosure and earning persistence (as a proxy of earning quality). We use the content analysis method with annual reports as a measure of social and environmental disclosure; the empirical validation is applied to the companies listed in the SBF 250 French stock market index over the 2005–2010 period. To measure earning persistence we opt for a regression of a time‐series model on panel data. The findings show that French companies are characterized by a high level of social and environmental reporting; this situation may affect positively the quality of earnings such as more persistent earnings. This means that companies with a higher level of social and environmental commitment are more likely to take benefits and to communicate more persistent earnings and be desirable to investors. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.

Suggested Citation

  • Lassaad Ben Mahjoub & Halioui Khamoussi, 2013. "Environmental and Social Policy and Earning Persistence," Business Strategy and the Environment, Wiley Blackwell, vol. 22(3), pages 159-172, March.
    • Handle: RePEc:bla:bstrat:v:22:y:2013:i:3:p:159-172
    DOI: 10.1002/bse.1739
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    2. Jorge A. Romero & Martin Freedman & Neale G. O'Connor, 2018. "The impact of Environmental Protection Agency penalties on financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1733-1740, December.
    3. Grougiou, Vassiliki & Leventis, Stergios & Dedoulis, Emmanouil & Owusu-Ansah, Stephen, 2014. "Corporate social responsibility and earnings management in U.S. banks," Accounting forum, Elsevier, vol. 38(3), pages 155-169.
    4. Mara Vogt & Nelson Hein & Fabricia Silva da Rosa & Larissa Degenhart, 2017. "Relationship between determinant factors of disclosure of information on environmental impacts of Brazilian companies," Estudios Gerenciales, Universidad Icesi, vol. 33(142), pages 24-38, March.
    5. Cláudia Pereira & Albertina Monteiro & Diana Silva & Armindo Lima, 2023. "Do the Levels of Environmental Sustainability Disclosure and Indebtness Affect the Quality of Earnings?," Sustainability, MDPI, vol. 15(4), pages 1-13, February.
    6. Roberto Maglio & Andrea Rey & Francesco Agliata & Rosa Lombardi, 2020. "Connecting earnings management and corporate social responsibility: A renewed perspective," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 1108-1116, March.

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