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Does CEO duality moderate environmental, social, and governance performance-earnings management relationship? Evidence from emerging markets

Author

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  • Mohapatra, Swati
  • Kumar, Ashish
  • Mohapatra, Malaya Ranjan
  • Srivastava, Vikas

Abstract

Study explores CEO duality's impact on ESG-EM relationship in six emerging markets. Findings reveal that ESG disclosures constraints accrual earnings management; however, high ESG scores lead to higher real earnings management, indicating possible greenwashing behavior. For three pillars of ESG, we find that firms with environmental disclosures constrain EM, while social disclosures tend to enhance EM practices. Study reveals that ESG and its sub-pillars have a curvilinear relationship with EM. CEO duality moderates ESG-EM to provide a cushion for potential greenwashing. ESG impact is not limited to EM; consequently, it affects the firms’ market performance by mediating real earnings management.

Suggested Citation

  • Mohapatra, Swati & Kumar, Ashish & Mohapatra, Malaya Ranjan & Srivastava, Vikas, 2025. "Does CEO duality moderate environmental, social, and governance performance-earnings management relationship? Evidence from emerging markets," Finance Research Letters, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016453
    DOI: 10.1016/j.frl.2024.106616
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