A. Salihi, Haslindar Ibrahim, Dayana Mastura Baharudin
{"title":"Real earnings management in related party transactions: does sustainable development triangle (SDT) matters for business innovation in Nigeria?","authors":"A. Salihi, Haslindar Ibrahim, Dayana Mastura Baharudin","doi":"10.1108/ijis-12-2022-0242","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThe study aims to examine the association between the sustainable development triangle and real earnings management (REM) and the moderating role of business innovation.\n\n\nDesign/methodology/approach\nThe study was based on the quadruple bottom line approach to measuring corporate sustainable development. For the REM, Roychowdhury model is used to identify the practices. The study used panel data using 740 firm-year observations from non-financial listed companies in the Nigerian market from 2011 to 2020, collected from the Nigeria Stock Exchange.\n\n\nFindings\nThe study finds a negative influence on the association of economic, environmental, social and governance (EESG) on REM in related party transactions. Thus, by regressing the three different components of REM separately, then EESG will have strongest impact as well. The study suggests a bidirectional association between EESG and REM. Furthermore, the study finds that business innovation strengthens the negative association between EESG and REM. The study concludes that sustainable companies in the Nigerian public market are less liable to practice REM.\n\n\nResearch limitations/implications\nThe study examines only non-financial listed companies quoted on the Nigeria Stock Exchange, which restricts the generalization of the findings.\n\n\nPractical implications\nThe findings of the study should be of immense value to the investors who need comprehensive appraisal of earnings quality to enhance sustainable development strategies for sustainable business innovation among Nigeria firms. Thus, sustainability and innovation can serve as the principles for supporting developing countries impacted by the COVID-19 pandemic and supporting a sustainable development.\n\n\nSocial implications\nThe study will be of immense value to policymakers, regulators and standard setters who demand for facts insightful of business practices and reporting behaviors for sustainable development.\n\n\nOriginality/value\nExisting studies have mainly focused on triple bottom line. This study adds to the existing body of literature on the Quadruple bottom line in an African market. More so, the study investigates the impact of business innovation on the relationship between economic, environmental, social and governance and real earnings management, which was rarely investigated in the prior literature.\n","PeriodicalId":44643,"journal":{"name":"International Journal of Innovation Science","volume":null,"pages":null},"PeriodicalIF":3.0000,"publicationDate":"2023-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Innovation Science","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/ijis-12-2022-0242","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 0
Abstract
Purpose
The study aims to examine the association between the sustainable development triangle and real earnings management (REM) and the moderating role of business innovation.
Design/methodology/approach
The study was based on the quadruple bottom line approach to measuring corporate sustainable development. For the REM, Roychowdhury model is used to identify the practices. The study used panel data using 740 firm-year observations from non-financial listed companies in the Nigerian market from 2011 to 2020, collected from the Nigeria Stock Exchange.
Findings
The study finds a negative influence on the association of economic, environmental, social and governance (EESG) on REM in related party transactions. Thus, by regressing the three different components of REM separately, then EESG will have strongest impact as well. The study suggests a bidirectional association between EESG and REM. Furthermore, the study finds that business innovation strengthens the negative association between EESG and REM. The study concludes that sustainable companies in the Nigerian public market are less liable to practice REM.
Research limitations/implications
The study examines only non-financial listed companies quoted on the Nigeria Stock Exchange, which restricts the generalization of the findings.
Practical implications
The findings of the study should be of immense value to the investors who need comprehensive appraisal of earnings quality to enhance sustainable development strategies for sustainable business innovation among Nigeria firms. Thus, sustainability and innovation can serve as the principles for supporting developing countries impacted by the COVID-19 pandemic and supporting a sustainable development.
Social implications
The study will be of immense value to policymakers, regulators and standard setters who demand for facts insightful of business practices and reporting behaviors for sustainable development.
Originality/value
Existing studies have mainly focused on triple bottom line. This study adds to the existing body of literature on the Quadruple bottom line in an African market. More so, the study investigates the impact of business innovation on the relationship between economic, environmental, social and governance and real earnings management, which was rarely investigated in the prior literature.
期刊介绍:
The International Journal of Innovation Science publishes fundamental and applied research in innovation practices. As the official journal of the International Association of Innovation Professionals (IAOIP), the journal is a forum for the exchange of advanced knowledge in innovation, including emerging technologies and best practices, tools and techniques, metrics, and organization design and culture; as well as the stakeholder engagement, change management, and leadership skills required to ensure innovation succeeds. Areas of Coverage: -Innovation processes, methods, techniques- Individual''s role in Innovation- Improvements in HR, marketing, finance, or other disciplines that enable innovation- Innovation practices in specific industries or countries- Innovation centers, incubators, labs...- Regional or national economic development/policies related to innovation- Innovation competency, skills- Innovation conventions, competitions, or training- Innovation for entrepreneurs-Regional impacts on innovation- Growing innovationthrough university programs- Attracting innovative companies and entrepreneurs