Corporate ESG Performance And Earnings Management

In the competitive capital market,the problem of earnings management of Chinese enterprises is increasingly prominent.In order to satisfy private interests or convey favorable information to the outside world,managers will carry out earnings management by changing accounting policies and constructing actual trading activities,which will not only damage the interests of stakeholders and mislead investors’ decisions,but also affect the resource allocation and healthy development of the capital market.ESG is an investment concept and enterprise evaluation index that measures the performance of enterprises in the aspects of environment,society and governance.Will enterprises with good ESG performance pay attention to the long-term development of enterprises and reduce earnings management behavior,or use the positive corporate image established by actively practicing ESG concept to cover up earnings management behavior?What role does media attention play?It has important research significance.Based on stakeholder theory,principal-agent theory,signal transmission theory and impression management theory,this paper selects the data of Chinese A-share listed companies from 2010 to 2021 as samples,builds regression models with accrual earnings management and real earnings management as explained variables and ESG score as explanatory variables,and studies the relationship between corporate ESG,ESG indicators and the two earnings management methods.It also analyzes the differences in the relationship between enterprises with different property rights and marketization process,and then further studies the moderating effect of media attention on the relationship between the two,as well as the differences in the moderating effect of media attention on enterprises with different property rights and marketization process.The results show that both accrual earnings management and real earnings management have significant inhibitory effects on corporate ESG performance.There is a significant negative correlation between E,S,G scores and accrued earnings management,and the significance level of S and G scores is higher than that of E scores.There is a significant negative correlation between S and G scores and real earnings management,while E scores and real earnings management are not significantly correlated.At the same time,when property rights are distinguished,the ESG performance of both state-owned enterprises and non-state-owned enterprises has a significant inhibitory effect on accrual earnings management.The inhibitory effect of ESG performance of non-state-owned enterprises on real earnings management is stronger than that of state-owned enterprises.When differentiating the marketization process,the inhibition effect of ESG performance on accrual earnings management and real earnings management of enterprises in high marketization process area is more significant than that of enterprises in low marketization process area.In addition,media attention can significantly weaken the inhibitory effect of ESG performance on accrual earnings management,but cannot significantly weaken the inhibitory effect of ESG on real earnings management.When distinguishing the nature of property rights,the weakening effect of media attention on the relationship between ESG and accrued earnings management is only significant in non-state-owned enterprises,while media attention does not play a significant moderating role in state-owned enterprises.When differentiating the marketization process,the weakening effect of media attention on the relationship between ESG and accrued earnings management is only significant in theenterprises in the low marketization process area,while for the enterprises in the high marketization process area,the media attention will significantly weaken the relationship between ESG and real earnings management.Based on the research conclusions,this paper puts forward relevant suggestions,hoping to promote enterprises to actively practice ESG concept,reduce earnings management behavior,and promote the sustainable development of enterprises and the healthy development of capital market.