What the study found
The study found that corporate social responsibility (CSR) does not uniformly reduce earnings management. Instead, CSR is linked to different patterns of accrual-based earnings management and real earnings management, and these patterns change with the level of creditor oversight.
Why the authors say this matters
The authors conclude that CSR may shift managerial opportunism across reporting channels rather than simply restraining it. They suggest this matters because monitoring intensity can shape whether managers rely more on accounting choices or on real business actions.
What the researchers tested
The researchers analyzed 92 Vietnamese manufacturing firms from 2017 to 2021 using panel data. They distinguished between accrual-based earnings management and real earnings management, and they used fixed effects, random effects, feasible generalized least squares, and instrumental variable GMM to address unobserved heterogeneity and endogeneity.
What worked and what didn't
Under weak creditor oversight, CSR was associated with higher accrual-based earnings management and lower real earnings management. Under stronger creditor oversight, leverage was associated with lower accrual-based earnings management in the validated specifications, while the real earnings management results suggested partial reallocation toward less observable real activity manipulation.
What to keep in mind
The study is based on manufacturing firms in Vietnam, so the results are limited to that sample and setting. The abstract also notes that the suspect-firm subsample analysis supports the proposed substitution mechanism, but it does not provide additional detail in the available summary.
Key points
- CSR was not a uniform constraint on earnings management.
- Weak creditor oversight was linked to higher accrual-based earnings management and lower real earnings management.
- Stronger creditor oversight was associated with lower accrual-based earnings management in validated specifications.
- The results suggested partial shifting toward less observable real activity manipulation under stronger monitoring.
- A suspect-firm subsample analysis was consistent with the substitution mechanism.
Disclosure
- Research title:
- CSR shifts earnings management form under creditor oversight
- Authors:
- Hanh Thi My Le, Huong Thi Truc Nguyen, Trần Khánh Lâm, Hieu Hoai Truong, Qian Long Kweh
- Institutions:
- American Institute of Certified Public Accountants, Anova Corp (Vietnam), Tien Giang General Hospital, Ton Duc Thang University
- Publication date:
- 2026-06-28
- DOI:
- 10.1002/csr.70789
- OpenAlex record:
- View
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