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Corporate social responsibility and earnings quality: Evidence from China

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  • Rezaee, Zabihollah
  • Dou, Huan
  • Zhang, Huili

Abstract

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.

Suggested Citation

  • Rezaee, Zabihollah & Dou, Huan & Zhang, Huili, 2020. "Corporate social responsibility and earnings quality: Evidence from China," Global Finance Journal, Elsevier, vol. 45(C).
    • Handle: RePEc:eee:glofin:v:45:y:2020:i:c:s1044028319300249
    DOI: 10.1016/j.gfj.2019.05.002
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    6. Zhihong Mao & Siyang Wang & Yu‐En Lin, 2024. "ESG, ESG rating divergence and earnings management: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3328-3347, July.

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    More about this item

    Keywords

    Corporate social responsibility; Corporate governance; Earnings quality; Chinese firms; State-owned-enterprises (SOEs); Marketization;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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