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A Study on the Impact of ESG Performance on Earnings Management of Agriculture-Related Companies

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  • Lei He

    (School of Economic and Management, Shaanxi University of Science and Technology, Xi’an 710021, China)

  • Junhao Jiang

    (School of Economic and Management, Shaanxi University of Science and Technology, Xi’an 710021, China)

Abstract

As an evaluation framework that systematically assesses a company’s environmental performance, social responsibility, and corporate governance, as a critical measure for evaluating corporate sustainable development, ESG performance exhibits unique and distinctive features within agribusiness firms. This study develops and analyzes several hypotheses using mediation and moderation effect models to empirically investigate the processes and effects of ESG performance on accrual-based earnings management using a sample of Chinese A-share agriculture-related listed businesses from 2009 to 2024. The results show a strongly inverse relationship between accrual-based earnings management and ESG performance in companies involved in agriculture. Additionally, by easing financial limitations, ESG performance has inhibited efforts on earnings management. The inhibitory effect of ESG performance on earnings management is more pronounced among agribusinesses subject to intensive media coverage, but significantly weaker among those with strong internal control quality. In order to maximize ESG practices, control financial behavior, and develop pertinent regulatory laws, this research offers agriculture-related businesses both theoretical and practical insights.

Suggested Citation

  • Lei He & Junhao Jiang, 2026. "A Study on the Impact of ESG Performance on Earnings Management of Agriculture-Related Companies," Sustainability, MDPI, vol. 18(9), pages 1-24, May.
    • Handle: RePEc:gam:jsusta:v:18:y:2026:i:9:p:4569-:d:1936034
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