IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i10p4222-d361194.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/10/4222/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/10/4222/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mei Cheng & K. R. Subramanyam, 2008. "Analyst Following and Credit Ratings," Contemporary Accounting Research, John Wiley & Sons, vol. 25(4), pages 1007-1044, December.
    2. Henri Servaes & Ane Tamayo, 2013. "The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness," Management Science, INFORMS, vol. 59(5), pages 1045-1061, May.
    3. Editorial Article, 0. "The Information for Authors," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 2.
    4. Editorial Article, 0. "Contents," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 2.
    5. Woo Sung Kim & Kunsu Park & Sang Hoon Lee, 2018. "Corporate Social Responsibility, Ownership Structure, and Firm Value: Evidence from Korea," Sustainability, MDPI, vol. 10(7), pages 1-20, July.
    6. Editorial Article, 0. "The Information for Authors," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 4.
    7. Editorial Article, 0. "The Information for Authors," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 3.
    8. Editorial Article, 0. "The Information for Authors," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 1.
    9. Editorial Article, 0. "The Information for Authors," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 4.
    10. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    11. Editorial Article, 0. "The Information for Authors," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 3.
    12. François Maon & Adam Lindgreen & Valérie Swaen, 2009. "Designing and Implementing Corporate Social Responsibility: An Integrative Framework Grounded in Theory and Practice," Journal of Business Ethics, Springer, vol. 87(1), pages 71-89, April.
    13. Editorial Article, 0. "The Information for Authors," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 2.
    14. Editorial Article, 0. "Contents," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 3.
    15. Zhichuan (Frank) Li & Caleb Thibodeau, 2019. "CSR-Contingent Executive Compensation Incentive and Earnings Management," Sustainability, MDPI, vol. 11(12), pages 1-12, June.
    16. Editorial Article, 0. "Contents," Economics of Contemporary Russia, Regional Public Organization for Assistance to the Development of Institutions of the Department of Economics of the Russian Academy of Sciences, issue 3.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. 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.
    5. Hyunmin Oh & Heungjoo Jeon, 2022. "Does Corporate Sustainable Management Reduce Audit Report Lag?," Sustainability, MDPI, vol. 14(13), pages 1-24, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maria Cleofe Giorgino & Enrico Supino & Federico Barnabè, 2017. "Corporate Disclosure, Materiality, and Integrated Report: An Event Study Analysis," Sustainability, MDPI, vol. 9(12), pages 1-15, November.
    2. Marhaendra Kusuma & Diana Zuhroh & Prihat Assih & Grahita Chandrarin, 2021. "The Effect of Net Income and Other Comprehensive Income on Future¡¯s Comprehensive Income With Attribution of Comprehensive Income as Moderating Variable," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 205-219, May.
    3. Kritana Prueksakorn & Cheng-Xu Piao & Hyunchul Ha & Taehyeung Kim, 2015. "Computational and Experimental Investigation for an Optimal Design of Industrial Windows to Allow Natural Ventilation during Wind-Driven Rain," Sustainability, MDPI, vol. 7(8), pages 1-22, August.
    4. Hualin Xie & Jinlang Zou & Hailing Jiang & Ning Zhang & Yongrok Choi, 2014. "Spatiotemporal Pattern and Driving Forces of Arable Land-Use Intensity in China: Toward Sustainable Land Management Using Emergy Analysis," Sustainability, MDPI, vol. 6(6), pages 1-17, May.
    5. Stephan E. Maurer & Andrei V. Potlogea, 2021. "Male‐biased Demand Shocks and Women's Labour Force Participation: Evidence from Large Oil Field Discoveries," Economica, London School of Economics and Political Science, vol. 88(349), pages 167-188, January.
    6. Tie Hua Zhou & Ling Wang & Keun Ho Ryu, 2015. "Supporting Keyword Search for Image Retrieval with Integration of Probabilistic Annotation," Sustainability, MDPI, vol. 7(5), pages 1-18, May.
    7. T. Karski, 2019. "Opinions and Controversies in Problem of The So-Called Idiopathic Scoliosis. Information About Etiology, New Classification and New Therapy," Biomedical Journal of Scientific & Technical Research, Biomedical Research Network+, LLC, vol. 12(5), pages 9612-9616, January.
    8. Sung-Won Park & Sung-Yong Son, 2017. "Cost Analysis for a Hybrid Advanced Metering Infrastructure in Korea," Energies, MDPI, vol. 10(9), pages 1-18, September.
    9. Wesley Mendes-da-Silva, 2020. "What Makes an Article be More Cited?," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 24(6), pages 507-513.
    10. Martin Valtierra-Rodriguez & Juan Pablo Amezquita-Sanchez & Arturo Garcia-Perez & David Camarena-Martinez, 2019. "Complete Ensemble Empirical Mode Decomposition on FPGA for Condition Monitoring of Broken Bars in Induction Motors," Mathematics, MDPI, vol. 7(9), pages 1-19, August.
    11. Akca Yasar & Gokhan Ozer, 2016. "Determination the Factors that Affect the Use of Enterprise Resource Planning Information System through Technology Acceptance Model," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(10), pages 1-91, September.
    12. Julián Miranda & Angélica Flórez & Gustavo Ospina & Ciro Gamboa & Carlos Flórez & Miguel Altuve, 2020. "Proposal for a System Model for Offline Seismic Event Detection in Colombia," Future Internet, MDPI, vol. 12(12), pages 1-17, December.
    13. Wisdom Akpalu & Mintewab Bezabih, 2015. "Tenure Insecurity, Climate Variability and Renting out Decisions among Female Small-Holder Farmers in Ethiopia," Sustainability, MDPI, vol. 7(6), pages 1-16, June.
    14. Wei Chen & Shu-Yu Liu & Chih-Han Chen & Yi-Shan Lee, 2011. "Bounded Memory, Inertia, Sampling and Weighting Model for Market Entry Games," Games, MDPI, vol. 2(1), pages 1-13, March.
    15. David Harborth & Sebastian Pape, 2020. "Empirically Investigating Extraneous Influences on the “APCO” Model—Childhood Brand Nostalgia and the Positivity Bias," Future Internet, MDPI, vol. 12(12), pages 1-16, December.
    16. Ping Wang & Jie Wang & Guiwu Wei & Cun Wei, 2019. "Similarity Measures of q-Rung Orthopair Fuzzy Sets Based on Cosine Function and Their Applications," Mathematics, MDPI, vol. 7(4), pages 1-23, April.
    17. Peterson, Willis L., 1973. "Publication Productivities Of U.S. Economics Department Graduates," Staff Papers 14105, University of Minnesota, Department of Applied Economics.
    18. Taeyeoun Roh & Yujin Jeong & Byungun Yoon, 2017. "Developing a Methodology of Structuring and Layering Technological Information in Patent Documents through Natural Language Processing," Sustainability, MDPI, vol. 9(11), pages 1-19, November.
    19. He-Yau Kang & Amy H. I. Lee & Tzu-Ting Huang, 2016. "Project Management for a Wind Turbine Construction by Applying Fuzzy Multiple Objective Linear Programming Models," Energies, MDPI, vol. 9(12), pages 1-15, December.
    20. Vasilyeva, Olga, 2021. "Agro-food clusters in the Republic of Kazakhstan: assessment and prospects of development," Economic Consultant, Roman I. Ostapenko, vol. 34(2), pages 13-20.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:10:p:4222-:d:361194. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.