Abstract
This study investigates the impact of Corporate Social Responsibility (CSR) on earnings management practices in Italian firms. Utilizing a sample of publicly listed Italian companies from 2008 to 2018, we analyze the relationship using various econometric models. Our findings suggest that firms with higher CSR engagement exhibit lower levels of earnings management, indicating that CSR acts as a governance mechanism. This effect is more pronounced in firms operating in highly regulated industries and those with stronger external monitoring. The study contributes to the literature on CSR and corporate governance by providing evidence from a European context and offers implications for regulators and investors regarding the role of CSR in improving financial reporting quality.
Keywords
Corporate Social Responsibility, Earnings Management, Corporate Governance, Italy, Financial Reporting Quality, Stakeholder Theory
Full Text
This study investigates the impact of Corporate Social Responsibility (CSR) on earnings management practices in Italian firms. Utilizing a sample of publicly listed Italian companies from 2008 to 2018, we analyze the relationship using various econometric models. Our findings suggest that firms with higher CSR engagement exhibit lower levels of earnings management, indicating that CSR acts as a governance mechanism. This effect is more pronounced in firms operating in highly regulated industries and those with stronger external monitoring. The study contributes to the literature on CSR and corporate governance by providing evidence from a European context and offers implications for regulators and investors regarding the role of CSR in improving financial reporting quality.