Corporate Citizenship and Earnings Attributes
Advances in Accounting, Incorporating Advances in International Accounting, Vol. 25, pp. 40-48, 2009
Posted: 25 Jul 2011
Date Written: December 8, 2008
This study examines the association between corporate citizenship and earnings attributes. We examine four accounting-based earnings attributes, including persistence, predictability, smoothness, and accrual quality. Our sample consists of 652 public companies used to select the 100 Best Corporate Citizens (BCC) published by Business Ethics Magazine in 2001 and 2002. We find that BCC’s earnings are more predictable, more persistent, and smoother than non-BCC’s. Consistent with prior research findings, our results also indicate that BCC report higher subsequent accounting returns than non-BCC in the three-year period following the publication of the 2001 and 2002 BCC lists. We attribute these findings to the effort of good corporate citizens to preserve their reputation and the public’s trust.
Keywords: corporate social responsibility, earnings persistence, earnings predictability, earnings smoothness, accrual quality
Suggested Citation: Suggested Citation