Written by Marc Oliveras

Article 1, Volume 2 Issue 1:

Is financial reporting quality related to corporate social responsability practices? Evidence from family firms

Jennifer Martinez-Ferrero, Lázaro Rodriguez-Ariza and Beatriz Cuadrado-Ballesteros

DOI: 10.26595/eamr.2014.2.1.1

Abstract


The aim of this research is to highlight the relationship between financial reporting quality and corporate social responsibility (CSR) on the family firm sphere. Using a database of 1275 companies for the period 2002–2010 and the GMM estimator of Arellano and Bond (1991) for panel data, our results show that those companies that report high-quality financial statements promote more CSR practices. However, this relationship is weaker in family firms which support the existence of an entrenchment effect that associates greater family ownership with poor-quality information. We argue that family firms differ from non-family regarding the effect of financial reporting quality on the level of CSR practices.

Keywords


  • Financial reporting quality (FRQ)
  • Earnings quality
  • Corporate social responsibility (CSR)
  • Family business

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