Title: The impact of corporate sustainability performance on accrual-based earnings management: evidence from emerging Indian economy

Authors: Jyoti Borgohain; Biswajit Ghose; Najul Laskar; Manish Kumar

Addresses: Department of Commerce, Tezpur University, Tezpur, Assam, 784028, India ' Department of Commerce, Tezpur University, Tezpur, Assam, 784028, India ' IILM University, Greater Noida, Uttar Pradesh, 201306, India ' Department of Commerce, Faculty of Commerce and Business, Delhi School of Economics, University of Delhi, Delhi, 110007, India

Abstract: This study examines the impact of corporate sustainability performance (CSP) on accrual-based earnings management (AEM) and the moderating effects of business group affiliation and foreign promoter holdings in the Indian context. Corporate sustainability disclosure score serves as the proxy for CSP, calculated through content analysis based on the Global Reporting Initiative (GRI) framework. Applying a system generalised method of moments (SGMM) model for estimation on a dataset from a sample of 410 non-financial BSE500 indexed firms over a period 2015-2016 to 2019-2020, the study establishes a negative association between CSP and AEM, suggesting that firms with better CSP tend to be less engaged in AEM. This negative association is relatively weaker for firms affiliated with business groups and those with foreign shareholders. The study has practical implications for various stakeholders, including the government, regulators, management of the firms, and investors, assisting them in their decision-making processes.

Keywords: accrual-based earnings management; AEM; business groups; corporate sustainability performance; CSP; foreign promoter holding; India.

DOI: 10.1504/GBER.2026.156152

Global Business and Economics Review, 2026 Vol.35 No.3, pp.289 - 312

Received: 20 Aug 2024
Accepted: 17 Feb 2025
Published online: 07 Sep 2026 *

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