Although corporate social responsibility (CSR) is widely considered as a tool for enhancing ethical standards and transparency, its impact on earnings management (EM), and the role that board diversity plays in shaping this relationship remain underexplored, particularly in emerging markets. This study aims to explore the impact of CSR on earnings management (EM) and to examine the moderating effect of board diversity, in terms of gender, nationality and age, in the Moroccan context.
The research uses data from 53 non-financial Moroccan listed companies over the period 2016–2023. Financial data are obtained from the Refinitiv database. Board characteristics are manually collected from companies' annual reports. CSR is measured using the CSR label awarded by the General Confederation of Moroccan Enterprises (CGEM), and EM is proxied using the modified Jones model. The study relies on correlation analysis, multiple regression models, and robustness tests.
In the baseline model, we find no significant relationship between CSR and EM. However, we found a positive and significant association across several subsamples. Specifically, (1) within the non-family firm sample, (2) within the BGD moderation model for the full sample, (3) within the non-family firm sample under the BGD moderation specification and (4) within the family firm sample under the BAD moderation model. Second, BGD exerts a significant negative moderating effect on the relationship between CSR and EM. This result holds in both the full sample and the non-family firm sample. In contrast, BND and BAD do not exhibit a significant moderating influence on the CSR-EM relationship in the baseline model. Notably, within the family firm sample, BAD demonstrates a negative and significant moderating effect on the CSR-EM link. This finding reveals that among family-controlled firms, age diversity plays a meaningful role in shaping the relationship between CSR practices and EM.
This study highlights the importance for managers and policymakers of considering CSR not merely as a tool for managerial entrenchment, but as a strategic lever to enhance firm performance and promote social and environmental development. Executives and directors are also encouraged to foster greater board diversity to enhance and its effectiveness, and to strengthen CSR engagement.
To the best of our knowledge, this is the first study to examine the relationship between CSR and earnings management while considering the moderating effect of board diversity in the Moroccan context. Therefore, it contributes to the CSR literature by exploring its impact on EM in an emerging-market setting. Additionally, it highlights the role of gender diversity in enhancing board oversight. Furthermore, it emphasizes the importance of institutional factors in shaping the CSR-EM relationship.
