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Corporate Sustainability Management, Earnings Transparency, and Chaebols

Author

Listed:
  • Hyun Min Oh

    (Department of Accounting, College of Social Sciences, Sunchon University, 255 Jungang-ro, Suncheon 57922, Korea)

  • Sam Bock Park

    (Department of Accounting, College of Commerce, Jeonbuk National University, 567 Baekje-daero, Deokjin-gu, Jeonju 54896, Korea)

  • Hee Young Ma

    (Shinwha Accounting Corporation, 15 Teheran-ro 86-gil, Gangnam-gu, Seoul 06179, Korea)

Abstract

This study examines the association of corporate sustainability management with earnings transparency. Based on previous studies that indicate that sustainability management activities reduce earnings management and corporate risk and increase a firm’s value, this study predicts that the firms with effective sustainability management will have a high earnings transparency. In addition, this study examines the differential effect of corporate sustainability management on earnings transparency according to whether or not a firm belongs to a chaebol. We use Environmental, Social, and Governance (ESG) ratings of the Korean Corporate Governance Service (KCGS) as a proxy for corporate sustainability management and apply the method of Cheng and Subramanyam (2008) to measure earnings transparency. The empirical results show that there is a significant positive relationship between corporate sustainability management and earnings transparency. Furthermore, the association between corporate sustainability management and earnings transparency is more negative for firms belonging to a chaebol. These results indirectly show that firms belonging to a chaebol have a lower level of information asymmetry than firms not belonging to a chaebol. This study focuses on corporate sustainability management as a determinant of earnings transparency, and is useful for examining the effect of belonging to a chaebol on the relationship between sustainability management and earnings transparency. Our results are expected to provide important implications not only for managers, but also for investors and regulators.

Suggested Citation

  • Hyun Min Oh & Sam Bock Park & Hee Young Ma, 2020. "Corporate Sustainability Management, Earnings Transparency, and Chaebols," Sustainability, MDPI, vol. 12(10), pages 1-19, May.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:10:p:4222-:d:361194
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    References listed on IDEAS

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    Cited by:

    1. Francesco Grimaldi & Alessandra Caragnano & Marianna Zito & Massimo Mariani, 2020. "Sustainability Engagement and Earnings Management: The Italian Context," Sustainability, MDPI, vol. 12(12), pages 1-16, June.
    2. Xiao Guan & Chunli Yao & Weimin Zhang, 2023. "Sustainability of Entrepreneurship: An Empirical Study on the Impact Path of Corporate Social Responsibility Based on Internal Control," Sustainability, MDPI, vol. 15(16), pages 1-17, August.
    3. Yong-Shik Kim, 2023. "The Association between Voluntary Carbon Disclosure and Accounting Comparability: Examining the Moderating Effect of Korean Business Groups," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    4. Elrazaz, Tariq & Aljifri, Khaled, 2026. "ESG and Earnings management nexus in the GCC: Evidence from a quantile-on-quantile regression approach," International Review of Economics & Finance, Elsevier, vol. 105(C).
    5. Ualison Rébula de Oliveira & Rodolfo Pombo Menezes & Vicente Aprigliano Fernandes, 2024. "A systematic literature review on corporate sustainability: contributions, barriers, innovations and future possibilities," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(2), pages 3045-3079, February.
    6. Cristóbal Parra Quesada & Manuela Cañizares Espada, 2024. "Relationship of market capitalization of the IBEX 35 to corporate social responsibility and transparency," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3551-3572, July.
    7. Hyunmin Oh & Sambock Park, 2021. "The Effect of Corporate Sustainable Management on the Relationship between Cost Stickiness and Earnings Transparency," Sustainability, MDPI, vol. 13(23), pages 1-19, December.
    8. Hyunmin Oh & Heungjoo Jeon, 2022. "Does Corporate Sustainable Management Reduce Audit Report Lag?," Sustainability, MDPI, vol. 14(13), pages 1-24, June.
    9. Kim, Tae-San & Kim, Yong-Shik, 2024. "The effect of financial statement comparability on the gaps between credit ratings and bond implied ratings: Focusing on the moderating effect of Korean business groups," International Review of Financial Analysis, Elsevier, vol. 96(PA).

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