Mediation effect of earnings management techniques on the relationship between CSR and corporate performance: evidence from the civil law countries

This paper aims to test whether earnings management techniques control the effect of corporate social performance in both current and subsequent firm performance. In fact, the effect of sustainable activities on firm performance through earnings management techniques are mainly examined as a mediating variable. The sample contains 9772 firm-year observations for 698 firms listed in countries with a civil law system. The findings highlight that CSR-oriented companies are less likely to engage in earnings management activities. In addition, CSR activities lead to minimize the trade-off from AEM strategy to REM. Thus, the findings reveal that CSR initiatives are still biased and are dependent on the interests of managers.