CSR Disclosure and Internationalisation: The Missing Elements Between Earnings Management and the Ma (WITHDRAWN)

Abstract

This paper explores the relationship between earnings management and firms’ value through the moderating effect of two missing elements—corporate social responsibility (CSR) disclosure and internationalisation. The main argument of the paper is that CSR disclosure can be used as a mitigating mechanism to weaken the negative relationship between earnings manipulation and market value. We tested our hypotheses on panel data for 223 publicly listed Russian firms for the period 2012–2018. Supported by legitimacy and stakeholder theory, we observed that firms that disclosed more CSR information experienced a weaker negative relationship between earnings management and market value because investors positively perceived their attempts to improve their socially responsible image. This negative effect was even weaker for firms that internationalised and had larger numbers of stakeholders, which placed greater expectations on firms to be transparent and responsible. Our results provide new insights into earnings management, CSR disclosure, and the internationalisation of emerging-market firms.