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Corporate social responsibility and managerial short-termism

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  • Yujing Gong
  • Kung-Cheng Ho

Abstract

This study examines whether corporate social responsibility (CSR) mitigates or exacerbates managerial short-termism. Using earnings management (EM) as a proxy for managerial short-termism, we find that socially responsible firms engage in less accrual-based and real EM activities. This finding supports the argument that socially responsible firms not only focus on current profits but also maintain long-term sustainable development. Further analyses reveal that the moderate effect of CSR on managerial short-termism is evident only for mandatory CSR disclosure firms. This suggests that regulatory non-financial reporting potentially mitigates information asymmetry and effectively constrains managerial short-termism.

Suggested Citation

  • Yujing Gong & Kung-Cheng Ho, 2021. "Corporate social responsibility and managerial short-termism," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 28(5), pages 604-630, September.
    • Handle: RePEc:taf:raaexx:v:28:y:2021:i:5:p:604-630
    DOI: 10.1080/16081625.2018.1540941
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    Cited by:

    1. Zhao, Ran & Zhu, Lu, 2024. "Credit default swaps and corporate ESG performance," Journal of Banking & Finance, Elsevier, vol. 159(C).
    2. Yadong Wang & Khaldoon Albitar & Imad Chbib, 2024. "Connecting the dots: A systematic review of corporate social responsibility, information asymmetry, and economic implications," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 5012-5031, September.
    3. Md. Mahiuddin Sabbir & Khan Md Raziuddin Taufique, 2022. "Sustainable employee green behavior in the workplace: Integrating cognitive and non‐cognitive factors in corporate environmental policy," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 110-128, January.
    4. Qilong Cao & Meng Ju & Jinglei Li & Changbao Zhong, 2022. "Managerial Myopia and Long-Term Investment: Evidence from China," Sustainability, MDPI, vol. 15(1), pages 1-20, December.
    5. Sergei G. Vagin & Elena I. Kostyukova & Natalia E. Spiridonova & Tatiana M. Vorozheykina, 2022. "Financial Risk Management Based on Corporate Social Responsibility in the Interests of Sustainable Development," Risks, MDPI, vol. 10(2), pages 1-13, February.
    6. Sergey Grishunin & Svetlana Suloeva & Ekaterina Burova, 2022. "Development of Risk Management Mechanism and the System of Risk Metrics to Evaluate and Enhance the Long-Term Orientation of the Strategies of Non-Financial Companies," Risks, MDPI, vol. 10(9), pages 1-16, September.
    7. Stephen J. Smulowitz & Didier Cossin & Hongze Lu, 2023. "Managerial Short-Termism and Corporate Social Performance: The Moderating Role of External Monitoring," Journal of Business Ethics, Springer, vol. 188(4), pages 759-778, December.
    8. 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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