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Earnings Management and CSR Disclosure. Family vs. Non-Family Firms

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  • Giovanna Gavana

    (Department of Economics, University of Insubria, 21100 Varese, Italy)

  • Pietro Gottardo

    (Department of Economics and Management, University of Pavia, 27100 Pavia, Italy)

  • Anna Maria Moisello

    (Department of Economics and Management, University of Pavia, 27100 Pavia, Italy)

Abstract

Building on Institutional theory and Signaling theory, integrated with the socioemotional wealth (SEW) approach, we studied the effect of earnings management (EM) practices on a firm’s Corporate Social Responsibility (CSR) disclosure behavior. In so doing, we analyzed a sample of 226 non-financial, family and non-family listed firms for the period, 2006–2015. Our results suggest that family firms, in instances of downward earnings management, are more prone to diverting attention from these practices by means of CSR disclosure, compared to non-family firms, although the level of family ownership exerts a moderating effect. Moreover, we found that a firm’s visibility, in terms of size, significantly enhances this behavior and that the effect is higher for family firms.

Suggested Citation

  • Giovanna Gavana & Pietro Gottardo & Anna Maria Moisello, 2017. "Earnings Management and CSR Disclosure. Family vs. Non-Family Firms," Sustainability, MDPI, vol. 9(12), pages 1-21, December.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:12:p:2327-:d:122754
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