The mandate of doing good with earnings management has been a subject of inconclusive findings from the past literature and leave issues on the benefits of socially responsible activities and financial reporting of the company. This study investigates the effects of corporate social responsibility (CSR) on accrual-based (AEM) and real-activities earnings management (REM). This study hypothesized that the trade-off exists between these two earnings management strategies, in light of increasing attention of CSR among Asian firms. In addition, this study examines whether the performance of firms in socially responsible activities exhibit different patterns of effect across the two measures of earnings management under the market economy, country, and business sector contexts. This study contemplates on 3906 firm-year observations from 2011 to 2017 of eleven countries in Asia. Our findings show that CSR conceals AEM while it constrains REM. These effects vary according to the market economy classifications, country, and business sector types. Each market, country and business sector has different standpoints in implementing CSR activities and earnings management relevant to the culture, macroeconomic considerations and demands from the stakeholders. Lastly, the discernment on the relevance of building corporate citizenship on financial reporting transparency is elaborated.

Intellectual capital (IC) and corporate social responsibility (CSR) provide a strong link between the enterprise and stakeholders. These strategic approaches are responsible in value formation for better financial performance. This study investigates the mediating effects of corporate financial performance on the relationship between IC components (ICs) and CSR of firms from the food industry in Asia. We analyzed 308 firm-year observations of 44 listed firms from 2011 to 2017. The results of this study provided mixed findings regarding the effects of ICs and CSR. In addition, results vary from the disaggregated effects of each IC component on environmental, social, and governance pillars. The results also indicate that the combination of accounting and market-based estimates of financial performance was found to be significant mediating factor to explain the phenomenon which varies per ICs and dimensions of CSR. Lastly, the implications for sustainable business practices and investments in knowledge-based resources in the food industry are elaborated.

This article reviews the relation between social capital and stock market participation via new technology. Its purpose is to acquire a thorough understanding of the structural, relational, and cognitive aspects of social capital’s influences and to recommend further empirical research ideas to the existing body of knowledge on household finance. It discusses the consideration of modern and highly technological platforms such as the internet stock market exchange platforms and applications. The stock market participation puzzle remains unsolved despite the progress in explaining the economic rationality behind investors decision making through behavioral finance. Furthermore, the researchers develop four propositions which can expound the existing relationship between social capital dimensions such as the structural, relational, and cognitive aspects and stock market participation of households. Doing so, we discuss the roles of risk attitude and the influence of cognitive ability such as financial awareness, financial literacy, and IQ (intelligence quotient) to enhance the existing body of knowledge. Practically, this article adds valuable ideas in solving the issue of limited participation not just in the stock market but in other financial markets through reflecting on the sociological and (green) technological concepts. Lastly, the implications for sustainable financial markets are elaborated.

In this study, we investigate the impact of corporate social responsibility (CSR) on earnings management through discretionary accruals and real-activities decisions, in light of the increasing attention and engagement of firms from different sectors. This study contemplates on non-financial Asian firms from controversial and non-controversial sectors with 889 and 3,017 firm-year observations from 2011 to 2017. The findings reveal that Asian firms likely use a mix of accrual-based earnings management (AEM) and real-activities earnings management (REM) as a strategy to manipulate reported earnings. In terms of sector classifications, managers from controversial sectors exhibit higher opportunistic behavior than managers from non-controversial sectors regarding accrual-based manipulation. We conjecture that CSR in controversial sectors is driven by a high demand for responsibility and actions based on its business operation, a motivation for managers to deceive stakeholders and behave opportunistically. In addition, we find that managers of non-controversial sectors are conservative in real-activities manipulations. However, CSR of firms from controversial sectors showed to have an insignificant effect on this manipulation strategy, consistent with managerial amorality towards real activities decision. Our findings contribute to the reconciliation of the impact of building corporate citizenship culture when providing credible financial reports. Lastly, the implications for sustainable business operation from the cognizance of controversies in managerial decisions are elaborated.

This study investigates the short-run and long-run effects of corporate social responsibility (CSR) on firms’ financial performance through market-adjusted stock returns from one year to three years holding periods. We analyze the year 2015 CSR data of 958 publicly-listed companies from 11 countries in Asia. This study also reflects on the disaggregated effects of three pillars of CSR, namely: environment, social, and governance. We conjecture that the trade-off does not exist between building corporate citizenship and financial performance, in light of increasing attention of CSR among Asian countries. We also examine the phenomenon in the contexts of country and sector levels. Our main findings reveal that CSR has a cumulative effect, which reinforces better financial performance in the future. This study also shows mixed evidence regarding the disaggregated effect of CSR pillars. Moreover, we find that the impact of CSR and its pillars on market-adjusted stock returns vary per country and per sector. We argue that our results are caused by regulatory compliance, priorities, demand from stakeholders, cultural factors, and macroeconomics considerations. The effect of CSR on market-adjusted stock returns varies over time and create a positive and negative result depending on the period of analysis because this strategy is a long-term process. Lastly, insights into the importance of building corporate citizenship on sustainability and firm performance are elaborated.