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Real earnings management and ESG disclosure in emerging markets: the moderating effect of managerial ownership from a social norm perspective

Real earnings management and ESG disclosure in emerging markets: the moderating effect of managerial ownership from a social norm perspective
Real earnings management and ESG disclosure in emerging markets: the moderating effect of managerial ownership from a social norm perspective
Drawing on social norm theory, this study delves into the nexus between real earnings manipulation (REM) and Environmental, Social, and Governance (ESG) disclosure within Egypt's emerging capital market. By analyzing data from the S&P/EGX ESG index (2013–2018) through a two-stage regression analysis, we unearth a noteworthy pattern: heightened REM practices correspond with reduced tendencies for ESG sustainability disclosure. Notably, this association is moderated by managerial ownership, which diminishes the negative linkage between REM and ESG transparency. A unique cultural insight emerges, revealing that religiously-aligned firms leverage REM as a risk-mitigation mechanism, leading to curtailed ESG disclosures. Our findings cast a spotlight on a possible managerial tilt towards short-term gains, often overshadowing long-term sustainability imperatives, especially in religiously influenced contexts. As we advance understanding of REM-ESG dynamics in religious emerging markets, our study highlights the pressing need for enhanced sustainability consciousness and accountability in these regions.
Social norm theory, Real earnings management, ESG sustainability disclosure, Emerging markets
2405-8440
Liu, Tingli
d438c01b-0c8f-435d-9f13-ce6eaaef6da2
Abdelbaky, Aya
9772eda4-a05f-4e41-873d-564e9f4de74a
A. Elamer, Ahmed
a1b4df68-5a8e-42da-9636-0252b673ac76
Elmahgoub, Mohamed
bf66be6b-835d-42c0-97cd-ec717922c916
Liu, Tingli
d438c01b-0c8f-435d-9f13-ce6eaaef6da2
Abdelbaky, Aya
9772eda4-a05f-4e41-873d-564e9f4de74a
A. Elamer, Ahmed
a1b4df68-5a8e-42da-9636-0252b673ac76
Elmahgoub, Mohamed
bf66be6b-835d-42c0-97cd-ec717922c916

Liu, Tingli, Abdelbaky, Aya, A. Elamer, Ahmed and Elmahgoub, Mohamed (2023) Real earnings management and ESG disclosure in emerging markets: the moderating effect of managerial ownership from a social norm perspective. Heliyon, 9 (12), [e22832]. (doi:10.1016/j.heliyon.2023.e22832).

Record type: Article

Abstract

Drawing on social norm theory, this study delves into the nexus between real earnings manipulation (REM) and Environmental, Social, and Governance (ESG) disclosure within Egypt's emerging capital market. By analyzing data from the S&P/EGX ESG index (2013–2018) through a two-stage regression analysis, we unearth a noteworthy pattern: heightened REM practices correspond with reduced tendencies for ESG sustainability disclosure. Notably, this association is moderated by managerial ownership, which diminishes the negative linkage between REM and ESG transparency. A unique cultural insight emerges, revealing that religiously-aligned firms leverage REM as a risk-mitigation mechanism, leading to curtailed ESG disclosures. Our findings cast a spotlight on a possible managerial tilt towards short-term gains, often overshadowing long-term sustainability imperatives, especially in religiously influenced contexts. As we advance understanding of REM-ESG dynamics in religious emerging markets, our study highlights the pressing need for enhanced sustainability consciousness and accountability in these regions.

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Accepted/In Press date: 20 November 2023
Published date: 3 December 2023
Keywords: Social norm theory, Real earnings management, ESG sustainability disclosure, Emerging markets

Identifiers

Local EPrints ID: 496071
URI: http://eprints.soton.ac.uk/id/eprint/496071
ISSN: 2405-8440
PURE UUID: e4bd7ac1-6905-48ac-a8a5-51f3ff984a1e

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Date deposited: 02 Dec 2024 17:56
Last modified: 02 Dec 2024 17:57

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Contributors

Author: Tingli Liu
Author: Aya Abdelbaky
Author: Ahmed A. Elamer

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