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Corporate Social Responsibility and Financial Reporting Quality: Evidence from Korean Retail Industry

Title
Corporate Social Responsibility and Financial Reporting Quality: Evidence from Korean Retail Industry
Author
이정환
Keywords
Chaebol Affiliates; Corporate Social Responsibility; ESG Score; Retail Firms
Issue Date
2019-06
Publisher
Korea Distribution Science Association (KODISA)
Citation
Journal of Distribution Science, v. 17, no. 6, Page. 33-42
Abstract
Purpose – We investigate whether a firm’s engagement in socially responsible activity affects the quality of financial reporting within the retail industry of Korean market. Recent studies argue that more socially responsible firms tend to show a better quality of financial reporting. Research design, data, and methodology – We use a variety of proxy variables related to the use of discretionary accruals and real activity manipulation to measure the quality of financial reporting. The total of environmental, social and governance score is used to represent the degree of socially responsible activity in the retail industry. We use regression models to examine whether more socially responsible firms show a higher quality of financial reporting. The sample of publicly traded Korea retail firms is analyzed from 2011 to 2016. Results – Our analysis finds supporting evidence for limited earning management via the use of discretionary accruals. We find, however, no significant relationship between the degree of social responsibility and the quality of financial reporting within chaebol affiliates unlike non-chaebol affiliates. Conclusions – Our results weakly support a better quality of financial reporting for more socially responsible firms. The results highlight the importance of firm characteristics in deciding the effect of socially responsible activity on corporate policies.
URI
https://www.kci.go.kr/kciportal/landing/article.kci?arti_id=ART002473401https://repository.hanyang.ac.kr/handle/20.500.11754/151530
ISSN
1738-3110; 2093-7717
DOI
10.15722/jds.17.6.201906.33
Appears in Collections:
COLLEGE OF ECONOMICS AND FINANCE[S](경제금융대학) > ECONOMICS & FINANCE(경제금융학부) > Articles
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