| Summary: | Chinese firms need to face increasing issues about corporate social responsibility (CSR). And due to rising economic impact from Chinese firms, global investors may suffer from scandals like earnings management (EM) and other irresponsible corporate behaviors, paying more attention to firms’ CSR and EM. This paper investigates how CSR is associated with EM. Inspired by the findings that CSR affects EM differently in various industries (Yip, Van Staden and Cahan, 2011), this paper selects Chinese listed manufacturing firms as samples and collect their data from 2013 to 2019 in order to examine how CSR affect firms’ earnings smoothing and earnings aggressiveness.
The findings show that CSR negatively affect firms’ earnings smoothing, however, the relationship is only weakly significant. And there is no significant relationship between CSR and earnings aggressiveness. Additionally, firms’ profitability has a significant negative effect on earnings smoothing, while has a significant positive effect on earnings aggressiveness. And firms’ leverage may drive earnings smoothing and lager firms have higher level of earnings aggressiveness.
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