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This study aims to investigate the relationship between corporate sustainability performance and earnings management in emerging East Asian economies.
Abstract
Purpose
This study aims to investigate the relationship between corporate sustainability performance and earnings management in emerging East Asian economies.
Design/methodology/approach
The authors base on the triple bottom line approach to measure corporate sustainability performance. In terms of earnings management, two models are applied to detect real activities manipulation and discretionary accruals. The authors use panel data analysis of 410 listed non-financial firms in emerging East Asian economies from 2016 to 2020 that are collected from the Thomson Reuters Eikon database.
Findings
The authors find a negative influence of corporate sustainability performance on real activities manipulation and discretionary accruals. The findings highlight the long-term perspective of sustainable development strategies in relation to earnings management. The authors conclude that sustainable firms in emerging East Asia are less likely to engage in earnings management.
Practical implications
The study would be of interest to investors who need more detailed assessments of financial reporting quality to facilitate their investment decision-making and to policymakers who need more understanding of business practices and reporting behaviors of East Asian firms.
Originality/value
The study has shed light on the role of corporate sustainability performance in constraining earnings management and the role of corporate ethics in providing transparent and reliable financial reporting in emerging East Asian economies.
Details
Keywords
Linh-TX Nguyen and Cuong-Le Thanh
The purpose of this study is to examine the influence of board characteristics on environmental performance in manufacturing firms of the emerging East Asian markets. The authors…
Abstract
Purpose
The purpose of this study is to examine the influence of board characteristics on environmental performance in manufacturing firms of the emerging East Asian markets. The authors adopt a triple perspective of environmental performance that focusses on three major environmental areas including resource reduction, emission reduction and product innovation.
Design/methodology/approach
The authors consider three main board characteristics, namely, board size, board independence and board leadership structure, and investigate their impacts on a multidimensional construct of environmental performance. Specifically, both linear and quadratic functions are applied to address a possibility of the non-linear relationship between board size and environmental performance. The authors use fixed-effects estimations on a sample of manufacturing firms in the emerging East Asian countries between 2011 and 2016.
Findings
The study explores an inverse U-shaped relationship between board size and environmental performance. The authors also reveal that manufacturing firms are more likely to have better environmental performance when the proportion of independent directors on board increases. However, the separation of CEO and board chair roles has no impact on environmental performance.
Practical implications
The findings have important implications by identifying the role of a board of directors in implementing environmental protection strategies and by providing a foundation for corporate efforts to enhance sustainable development.
Originality/value
The study provides complete understanding of environmental performance as a multidimensional construct and sheds light on the influence of board characteristics, especially the inverse U-shaped influence of board size, on environmental performance in the East Asian manufacturing industries.
Details