Corporate social responsibility earnings management and corporate financial performance

  • Moritz Florian Alexander Böck (Student)

Student thesis: Master's Thesis


This paper examines the relation of corporate social responsibility (CSR) with two types of earnings management (EM) measures, accrual based (AEM) and real earnings management (REM) of companies in Europe. Additionally, the moderating role of EM in the relationship between CSR and corporate financial performance (CFP) is investigated. I employ a European panel dataset for the period 2008 - 2019, consisting of 3,729 firm-year observations of companies in the STOXX Europe 600 Index, as well as smaller European companies. Using the so-called Environmental, Social and Governance (ESG) factors, provided by the Asset4 database of Thomson Reuters, are used to measure CSR, I find that higher ESG scores lead to significantly lower AEM and REM. Dividing the ESG score in its three pillar scores, the results show that social performance decreases both AEM and REM. Contrary corporate governance performance has a significant positive impact on REM and no effect on AEM. Moreover, I find that in this setting, AEM decreases the magnitude of the relationship between CSR and CFP in the short- and medium-term. REM decreases the positive impact of CSR and CFP in the short-term, however demonstrates the opposite in the medium-term, implying that REM increases the positive effect of CSR on CFP.
Date of Award26 Jan 2021
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorFani Kalogirou (Supervisor)


  • Earnings management
  • Corporate social responsibility
  • ESG
  • Corporate financial performance


  • Mestrado em Finanças

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