The relationship between CSR disclosure and accounting conservatism: The role of state ownership

• In Event: 4.02. CSR/ESG Reporting and Accounting Quality

Abstract

Although a number of empirical studies have explored an association between corporate social responsibility (CSR) and accounting conservatism, this paper investigates how state ownership moderates this relationship in the context of the emerging Russian economy. Drawing upon legitimacy theory and stakeholder-enhancing perspectives of CSR disclosure, our paper contributes to the debate on the role of the government in emerging economies. Based on a sample of 223 publicly listed Russian companies for the period of 2012–2017, we find that companies with higher CSR disclosure tend to have more conservative financial reporting practices. We observe, however, that Russian state ownership has a negative moderating effect on this association, in line with agency theory. Moreover, we explore the unique structure of Russian companies’ state ownership, whereby public companies often have a combination of federal, regional, and municipal state ownership, the outcome of the 1990s privatization processes in Russia. We find that the moderating effect varies with the level and combination of the three types of state ownership and that federal state ownership alone or in combination with regional or municipal levels of state ownership has a significantly negative impact on the CSR disclosure-accounting conservatism association.

Authors

• Oksana Kim, Minnesota State University - Mankato

• Tatiana Garanina, University of Vaasa