Do corporate anti-bribery and corruption commitments enhance environmental management performance? The moderating role of corporate social responsibility accountability and executive compensation governance

This study aims to examine the potential impact (substantive or symbolic) of firms' anti-bribery and corruption commitments (ABCC) on environmental management performance (ENVS). We also seek to explore whether this link is contingent on corporate social responsibility (CSR) accountability and executive compensation governance. To achieve these aims, we use a sample of 2151 firm-year observations representing 214 FTSE 350 non-financial companies from 2002 to 2016. Our findings support a positive association between firms’ ABCC and ENVS. In addition, our evidence shows that CSR accountability and executive compensation governance are significant substitutes for ABCC to engender enhanced ENVS. Our study highlights practical implications for organisations, regulators and policymakers, and suggests several avenues for future environmental management research. Overall, our findings are unsensitive to alternative measures of ENVS, different types of multivariate regression methods, namely ordinary least squares (OLS) and two-step generalized method of moments (GMM) regressions, and controlling for industry environmental risk and the implementation of the UK Bribery Act 2010

Insights into corporate social responsibility disclosure among multinational corporations during host-country political transformations: Evidence from the Libyan oil industry

This study investigates the corporate social responsibility disclosure (CSRD) practices of multinational corporations (MNCs) operating in the Libyan oil industry, particularly amidst significant political transformations within the host-country (HSC). By examining these insights, we aim to shed light on how these corporations navigate and address CSRD considerations in a dynamic and politically evolving environment. To analyse these aspects, we employ various econometric models, including two-stage least squares (2SLS) and propensity score matching (PSM). Our examination covers a dataset of 6000 data points representing 35 multinational oil corporations headquartered in 18 different home countries (HMCs) across five continents, spanning the years from 2008 to 2015. Our findings indicated that the level of institutional quality convergence between MNCs' HMCs and HSC significantly determines the extent of HSC-related CSRD by MNCs. Additionally, the study emphasised that MNCs' internationalisation and business horizon within the HSC are critical factors influencing their CSRD in that country. The findings furthermore suggested that MNCs with a higher CSRD might exert an influence on the political decisions of their HMCs' governments concerning the political crisis in the HSC

Do creditors care about greening in corporations? Do contingencies matter?

This study assesses whether creditors consider ecological practices (i.e., resource usage, emissions, and eco-innovation) when setting interest rates during loan decisions and whether firm-level contingencies play a role in this relationship. Based on a sample of 38,127 firm-year observations of non-financial firms operating worldwide between 2004 and 2019, our evidence indicates that eco-friendly practices have no significant direct effect on the cost of debt. Thus, we consider other theoretically expected channels that moderate this link. Notably, profitability and board gender diversity significantly moderate the relationship between eco-friendly practices and the cost of debt. Further investigation reveals interesting associations between low and high governance systems, low and high financial development environments, code law versus common law systems, and polluting versus non-polluting sectors. We suggest theoretical and practical implications by which firms can reap greater benefits from environmental engagement

Board composition, ownership structure and financial distress: insights from UK FTSE 350

Purpose This study aims to investigate the possible implications of compliance with corporate governance (CG) provisions, including board composition and ownership structures, on the firm’s likelihood of falling into financial distress. Design/methodology/approach The study applies a random-effects logistic regression model as a baseline analysis using a sample of 110 FTSE 350 manufacturing companies from 2014 to 2019. This technique is supported by conducting a two-stage Heckman regression model to overcome the potential existence of endogeneity problems. Findings The empirical evidence suggests that board composition and ownership structure are heterogeneously associated with financial distress probabilities in that they might have either reduced or increased the financial distress of the sampled firms. Specifically, board independence, board gender diversity, audit committee independence and institutional ownership negatively influence the likelihood of financial distress. In contrast, and consistent with the expectations, ownership concentration is positively attributed to financial distress, while the board size, audit committee size and managerial ownership have insignificant impacts on financial distress. Originality/value The study extends the existing body of knowledge by examining the collective effect of board characteristics and ownership structures on firms’ financial distress likelihood among a sample of manufacturing firms within the FTSE 350 index post the 2008 global financial crisis and following the recent CG reforms in the UK during the study period from 2014 to 2019

Does the presence of an environmental committee strengthen the impact of board gender diversity on corporate environmental disclosure? Evidence from sub‐Saharan Africa

This study examines the relationship between board gender diversity, the presence of environmental committees and corporate environmental disclosure (CED). Using 1130 firm-year observations of 113 firms listed across five sub-Saharan Africa (SSA) stock markets from 2010 to 2019, we find that the extent of CED in SSA is low compared with developed countries. However, panel quantile regression analysis reveals that the presence of women directors is positively associated with CED, and the relationship is contingent on the presence of an environmental committee. The study makes three principal contributions: It adds to the limited literature on the relationship between board gender diversity and CED, where virtually all previous studies have been conducted in developed countries; it is the first to examine the direct relationship between environmental committees and CED in the developing world; and, most importantly, it is the first study to examine the possible moderating influence of environmental committees

Abnormal real activities, meeting earnings targets and firms' future operating performance: evidence from an emerging economy

Purpose This paper aims to examine the extent to which real earnings management (REM) is used in Jordan to meet zero or previous year's earnings, and how this impacts the subsequent operating performance of Jordanian firms. Design/methodology/approach The study used a sample of 98 Jordanian listed firms over the 2010–2018 period. To test the research hypotheses, which are formulated in accordance with both, agency theory and signalling theory, multivariate regression is performed using a pooled OLS estimation. Additionally, a two-step dynamic generalised method of moment (GMM) model has been estimated to address any concerns regarding the potential occurrence of endogeneity issues. Findings The results show that Jordanian firms that meet zero or last year's earnings tend to exhibit evidence of real activities manipulations. More specifically, suspect firms show unusually low abnormal discretionary expenses and unusually high abnormal production costs. Further, consistent with the signalling earnings management argument, the authors find that abnormal real-based activities intended to meet zero earnings or previous year's earnings potentially improve the subsequent operating performance of Jordanian firms. This implies that REM is not totally opportunistic, but it can be used to enhance the subsequent operating performance of Jordanian firms. Our findings are robust to alternative proxies and endogeneity concerns. Practical implications The findings have several implications for policymakers, regulators, audit professionals and investors in their attempts to constrain REM practices to enhance financial reporting quality in Jordan. Managing earnings by reducing discretionary expenses appeared to be the most convenient way to manipulate earnings in Jordan. It provides flexibility in terms of time and the amount of spending. The empirical evidence, therefore, reiterates the crucial necessity to refocus the efforts of internal and external auditors on limiting this type of manipulation to reduce the occurrence of REM activities and enhance the subsequent operating performance of listed firms in Jordan. Drawing on Al-Haddad and Whittington (2019), the evidence also urges regulators and standards setters to develop a more effective enforcement mechanism for corporate governance provisions in Jordan to minimise the likelihood of REM incidence. Originality/value This study contributes to the body of the accounting literature by providing the first empirical evidence in the Middle East region overall on the use of REM to meet zero or previous year earnings by Jordanian firms. Moreover, the study is the first to empirically examine the relationship between REM and Jordanian firms' future operating performance

Corporate social responsibility disclosure and corporate social irresponsibility in emerging economies: does institutional quality matter?

The Panama Papers (2016), Paradise Leaks (2017), and Pandora Papers (2021) have revealed the extensive practice of corporate tax avoidance. Yet, the tax behavior of companies claiming to be “socially responsible” has been less examined. This study examines the association between corporate social responsibility disclosure (CSRD) and tax avoidance, particularly in developing economies, focusing on Sub-Saharan Africa (SSA). By analyzing data from 600 firm-year observations across 13 SSA countries using panel quantile regression, we found a negative relationship between CSRD, which includes ethical, social, and environmental dimensions, and tax avoidance. This aligns with legitimacy theory, indicating that firms are increasingly adopting CSR transparency to meet societal expectations and gain stakeholder trust, avoiding socially irresponsible behaviors. Furthermore, the quality of national governance significantly moderates the CSRD–tax avoidance relationship, supporting the concept of institutional isomorphism. This evidence is valuable for professionals and policymakers and encourages further research to deepen and broaden these findings

Corporate environmental disclosure and earnings management—The moderating role of corporate governance structures

Our study examines whether internal corporate governance (CG) mechanisms moderate the relationship between a firm's engagement in corporate environmental disclosure (CED) and earnings management (EM) practices in an emerging economy. Using a sample of 100 Jordanian listed firms from 2010 to 2014 (i.e., 500 firm-year observations), our findings reveal that while the relationship between CED and earnings manipulations is negative, the links between CG arrangements and EM are heterogeneous in that they might have either reduced or increased earnings manipulations in Jordan. Furthermore, some CG structures, such as board size, managerial, and institutional ownership structures have moderating effects on the CED-EM nexus. Our research highlights the significance of considering internal CG mechanisms to explain the link between CED and EM in the context of emerging economies. Our results help to explain and place into setting the earlier mixed results on the association between CED and earnings manipulations and most importantly add to the debate about whether CG structures detrimental to the CED-EM nexus. This study allows for a richer understanding of how managers respond to CED initiatives and CG reforms in relation to reducing earnings manipulations, which offers policymakers, board directors and managers, a set of context-specific recommendations related to the crucial need for more concerted efforts to ensure corporate sustainability in emerging economies

Market structure, ESG performance, and corporate efficiency: Insights from Brazilian publicly traded companies

Using a sample of Brazilian listed companies, our study investigates the directional cause–effect relationship between market structure, ESG performance, and firm efficiency under a Stochastic Structural Relationship Programming (SSRP) model. Our empirical evidence is threefold. First, our findings indicate that firms with better environmental performance are more efficient, whereas lower ESG performance and poorer corporate governance practices are associated with a higher level of efficiency. Second, our study suggests that market structure measures (i.e., competition, concentration, and market power) have heterogeneous impacts on various ESG indexes. Specifically, higher market competition is associated with a lower concentration, better ESG performance and environmental performance, but worse corporate governance performance, although market power can only enhance the environmental and governance performance of firms. Third, the market structure proxies employed in this study are significantly attributed to firm efficiency. Our findings provide practical implications for various stakeholders and suggest avenues for future studies that can build on our evidence

Is earnings management associated with corporate environmental disclosure?

Purpose This study aims to investigate the association between corporate environmental disclosure (CED) and earnings management (EM) in a Gulf Cooperation Council (GCC) emerging market, namely, Kuwait. Design/methodology/approach Using panel data from firms listed on the Kuwaiti stock exchange from 2010 to 2014, this paper applies a fixed-effects model to examine the CED-EM nexus. This analysis was supplemented with estimating a two-stage least-squares (2SLS) model and a generalised method of moment model to address any concerns regarding endogeneity problems. Findings The results are suggestive of a significant and negative relationship between CED and EM in Kuwait. This implies that the environmentally responsible managers are less likely to be engaged in EM practices in Kuwait. Research limitations/implications The theoretical implication of the results of this study is that managers in Kuwait seem to use CED as a method to decrease the possibility of any formal or informal actions that could be imposed upon their activities. Originality/value So far, a limited number of studies focused on examining the CED-EM nexus internationally. Furthermore, studies carried out to examine the CED-EM link within a GCC market is virtually non-existent. This study, therefore, presents the first empirical analysis of this relationship in Kuwait. Also, this study is of a significant value stemming from the environmental challenges that are facing Kuwait as an oil-reliant economy coupled together with the crucial economic development in Kuwait and its critical contribution to the GCC economy