Dr Shuning Chen, a researcher of the base, has published a collaborative paper titled "How does ESG constrain corporate earnings management? Evidence from China" in the Finance Research Letters.

Abstract：This paper explores whether and how ESG can constrain firms’ earnings management behavior in China. We find that firms with higher ESG performance are less likely to engage in earnings management. Firm visibility and managerial ownership strengthen the ESG-EM negative relationship, while managerial overconfidence weakens it. To further reveal the underlying mechanism, we find that the constraining effect of ESG performance on earnings management is partially mediated by attracting more analysts. Different from the existing explanations of reducing information asymmetry and ethical perspective, this study sheds new light on the mechanism of ESG's regulating corporate opportunistic behavior in China.

Keywords：ESG; Earnings management; Analyst coverage; Firm visibility; Managerial ownership; Managerial overconfidence

Link：https://doi.org/10.1016/j.frl.2024.104983

Author profile

Shuning Chen, tutor of School of Accounting, Zhongnan University of Economics and Law. Her research interests include capital market and investor behavior, big data, and corporate governance.