Earnings management, financial performance and the moderating effect of corporate social responsibility: evidencefrom France

The purpose of this paper is to examine the impact of earnings management on financial performance. In addition, the authors investigate whether corporate social responsibility has a moderating effect on the impact of earnings management on financial performance.,The empirical study is based on a sample of French companies listed on the CAC-All-Tradable index over the period 2008–2018. Feasible generalized least square regression method is used to estimate the econometric models.,Based on panel data of 3,003 French firm-year observations, the authors demonstrate that earnings management has a negative and significant impact on financial performance. Indeed, corporate social responsibility moderates positively the negative impact of earnings management on financial performance in the French context.,The findings have several implications for regulatory, investors and academic researchers. For regulators, it is appropriate to promote more several standards related to corporate social responsibility and earnings management. For investors, considering societal issues is very important in making decisions. For academic researchers, the results show that it is important to discover how corporate social responsibility can influence the relation between earnings management and financial performance.,The existing literature has generally focused on the impact of earnings management on financial performance and the empirical tests did not yield similar results. The study shows that corporate social responsibility has a moderating role in determining the impact of earnings management on financial performance.