Table 3 Accrual earnings management,...

Table 3

Accrual earnings management, corporate social responsibility and future performance using a performance-matched model

	${ADJ_ROA}_{it + 1}$
	${ABS_DAC_K}_{it}$	${DAC_Positive_K}_{it}$	${DAC_Negative_K}_{it}$
${CSRI}_{it}$	−0.000	0.003	−0.008
${CSRI}_{it}$	[−0.019]	[0.428]	[−0.767]
${DAC_K}_{it}$	0.002	0.000	−0.003
${DAC_K}_{it}$	[1.350]	[0.078]	[−1.281]
${CSRI}_{it} x {DAC_K}_{it}$	−0.014***	−0.014***	0.014*
${CSRI}_{it} x {DAC_K}_{it}$	[−3.265]	[−2.709]	[1.771]
${ROA}_{it}$	0.491***	0.471***	0.538***
${ROA}_{it}$	[24.814]	[20.246]	[14.344]
${SALES_GROWTH}_{i, t}$	−0.005***	−0.004**	−0.005
${SALES_GROWTH}_{i, t}$	[−2.776]	[−2.256]	[−1.280]
${M / B}_{it}$	0.016***	0.012***	0.025***
${M / B}_{it}$	[7.352]	[4.757]	[6.330]
${Z_SCORE}_{it}$	−0.000	0.001	−0.006***
${Z_SCORE}_{it}$	[−0.527]	[1.086]	[−2.803]
${DUAL}_{it}$	−0.002	−0.003	−0.003
${DUAL}_{it}$	[−0.926]	[−0.934]	[−0.606]
${SIZE}_{it}$	−0.001	−0.001	−0.004***
${SIZE}_{it}$	[−1.397]	[−0.889]	[−2.676]
${AGE}_{it}$	0.001	0.001	0.001
${AGE}_{it}$	[1.309]	[1.160]	[0.829]
Constant	0.013	−0.001	0.115***
Constant	[0.521]	[−0.022]	[2.593]
Observations	2,467	1,445	1,022
Year/Industry dummies	YES	YES	YES
Adjusted R²	0.315	0.321	0.300
F-value	68.33***	41.86***	27.45***

	${ADJ_ROA}_{it + 1}$
	${ABS_DAC_K}_{it}$	${DAC_Positive_K}_{it}$	${DAC_Negative_K}_{it}$
${CSRI}_{it}$	−0.000	0.003	−0.008
${CSRI}_{it}$	[−0.019]	[0.428]	[−0.767]
${DAC_K}_{it}$	0.002	0.000	−0.003
${DAC_K}_{it}$	[1.350]	[0.078]	[−1.281]
${CSRI}_{it} x {DAC_K}_{it}$	−0.014***	−0.014***	0.014*
${CSRI}_{it} x {DAC_K}_{it}$	[−3.265]	[−2.709]	[1.771]
${ROA}_{it}$	0.491***	0.471***	0.538***
${ROA}_{it}$	[24.814]	[20.246]	[14.344]
${SALES_GROWTH}_{i, t}$	−0.005***	−0.004**	−0.005
${SALES_GROWTH}_{i, t}$	[−2.776]	[−2.256]	[−1.280]
${M / B}_{it}$	0.016***	0.012***	0.025***
${M / B}_{it}$	[7.352]	[4.757]	[6.330]
${Z_SCORE}_{it}$	−0.000	0.001	−0.006***
${Z_SCORE}_{it}$	[−0.527]	[1.086]	[−2.803]
${DUAL}_{it}$	−0.002	−0.003	−0.003
${DUAL}_{it}$	[−0.926]	[−0.934]	[−0.606]
${SIZE}_{it}$	−0.001	−0.001	−0.004***
${SIZE}_{it}$	[−1.397]	[−0.889]	[−2.676]
${AGE}_{it}$	0.001	0.001	0.001
${AGE}_{it}$	[1.309]	[1.160]	[0.829]
Constant	0.013	−0.001	0.115***
Constant	[0.521]	[−0.022]	[2.593]
Observations	2,467	1,445	1,022
Year/Industry dummies	YES	YES	YES
Adjusted R²	0.315	0.321	0.300
F-value	68.33***	41.86***	27.45***

Note(s): All test statistics and significance levels are computed using standard errors adjusted through a two-dimensional clustering approach at both the firm and year levels (Petersen, 2008). All variables are defined in Appendix 1. ***, ** and * denote statistical significance at the 1, 5 and 10% confidence levels, respectively

This table presents OLS regression results of Equation (5) as below

${ADJ_ROA}_{it + 1} = β_{0} + β_{1} {CSRI}_{it} x {ABS_DAC_K}_{it} + β_{2} {ROA}_{it} + β_{3} {SALES_GROWTH}_{i, t} + β_{4} {M / B}_{it} + β_{5} {Z_SCORE}_{it} + β_{6} {DUAL}_{it} + β_{7} {SIZE}_{it} + β_{8} {AGE}_{it} + \sum_{k} β_{k} {YEA R_{DUMMY}}_{it} + \sum_{j} β_{j} {INDUSTR Y_{DUMMY}}_{it} + ε_{it}$

Source(s): The table is created by authors, Kothari et al. (2005)

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