Firm governance structures, earnings management, and carbon emission disclosures in Chinese high‐polluting firms

Abbas, Ali; Zhang, Guoqing; Bilal; Chengang, Ye

Abstract

This study examines the influence of firm governance structures (board size, independence, CEO duality, director share ownership, and board meeting frequency) in relation to carbon emission disclosures by high-polluting Chinses firms. In addition, the study further examined the moderating role of earnings management on this relationship. In line with stakeholder and agency theories, our study identified that the large and independent boards exercise and demonstrate a higher degree of carbon emission disclosures. However, CEO duality and director share ownership are associated with lower carbon emission disclosures. In addition, the study determined that higher earnings management results in a reduced level of carbon emission disclosures. Lastly, a firm earnings management strategy moderates the relationship between a firm governance structure and its carbon emission disclosures. The findings from the study are consistent with multiple econometric models and variables. The findings from the study contribute to the literature in the areas of firm corporate governance and carbon emission disclosures by documenting the moderating role of earnings management, which is not evident in previous studies; provide an enhanced perspective on the implications for firms, regulators, policymakers, and stakeholders who have an interest in reducing carbon emissions and advancing climate change mitigation goals in line with UN's Sustainable Development Goal (SDG) 7: climate action, and zero emissions goal by 2050.

Citation

Abbas, A., Zhang, G., Bilal, & Chengang, Y. (2023). Firm governance structures, earnings management, and carbon emission disclosures in Chinese high‐polluting firms. Business Ethics, the Environment and Responsibility, 32(4), 1470-1489. https://doi.org/10.1111/beer.12582

• Journal Article Type: Article
• Acceptance Date: Jul 26, 2023
• Online Publication Date: Aug 27, 2023
• Publication Date: 2023-10
• Deposit Date: Aug 31, 2023
• Publicly Available Date: Aug 31, 2023
• Journal: Business Ethics, the Environment & Responsibility
• Electronic ISSN: 2694-6424
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 32
• Issue: 4
• Pages: 1470-1489
• DOI: https://doi.org/10.1111/beer.12582
• Keywords: Management, Monitoring, Policy and Law; Organizational Behavior and Human Resource Management; Economics and Econometrics; Philosophy; Business and International Management
• Public URL: https://durham-repository.worktribe.com/output/1727265