ABSTRACT

Extant studies have investigated the relation between corporate social responsibility (CSR) endeavours and earnings quality based on monotonic models, showing mixed and inconclusive empirical evidence. By identifying heterogeneity in CSR investments, we extend prior literature to explore the potentially nonmonotonic nature of this relation. Specifically, we classify firms into two sub-groups, entities underinvesting and overinvesting in CSR activities, in which the levels of CSR investments are lower and higher than the theoretically optimal point respectively. Our empirical results show that the level of CSR underinvestment is positively associated with the magnitude of both accrual-based earnings management (AEM) and real earnings management (REM) and, hence, negatively related to earnings quality. For firms overinvesting in CSR activities, we do not find a significant relation between CSR overinvestment and AEM. The empirical analyses for real activities manipulation exhibit inconsistent results throughout our four REM proxies. However, the mixed evidence for firms with CSR overinvestment cannot fully exclude the possibility that overinvesting in CSR activities has a significant impact on future financial reporting quality. Varying incentives for CSR overinvestment in different firms could drive the inconsistent results. The positive effect of CSR overinvestment by some firms may offset the negative effect brought about by other entities, making the overall effect minor and unnoticeable. Our empirical results, together with some other CSR-related research, emphasise the need for more transparent reporting regarding the detailed nature, aim, and strategy of relevant CSR investments to help investing communities and other constituents better understand the incentives behind CSR activities.

摘要

现有研究基于单调模型研究了企业社会责任（CSR）努力与盈余质量之间的关系，显示了混合的和不确定的经验证据。通过确定企业社会责任投资的异质性，我们扩展了先前的文献，以探索这种关系的潜在非单调性。具体来说，我们将企业分为两个子类，即在企业社会责任活动中投资不足和投资过度的实体，其中企业社会责任投资的水平分别低于和高于理论上的最佳点。我们的经验结果表明，企业社会责任投资不足的水平与应计制盈余管理（AEM）和实际盈余管理（REM）的大小呈正相关，因此与盈余质量呈负相关。对于过度投资企业社会责任活动的公司，我们发现企业社会责任过度投资与AEM之间没有显着关系。真实活动操纵的经验分析在我们的四个REM代理中显示出不一致的结果。但是，对于企业社会责任过度投资的公司而言，混杂的证据不能完全排除企业社会责任活动过度投资对未来财务报告质量产生重大影响的可能性。不同企业对企业社会责任过度投资的诱因可能导致结果不一致。一些公司对企业社会责任过度投资的积极影响可能抵消了其他实体带来的消极影响，从而使总体影响微不足道且不引人注意。我们的经验结果以及其他一些与企业社会责任相关的研究都强调，对于详细的性质，目标，