Corporate social responsibility and earnings transparency: Evidence from Korea

The objective of this study was to investigate the association between corporate social responsibility (CSR) and earnings transparency of Korean companies. Transparency is one of key principles of CSR activities. We will focus on accounting transparency as accounting provides fundamental financial information about a company. Our results showed that companies with superior CSR activities had higher earnings transparency. This suggests that the more a company performs CSR, the more it gets trust from market participants on earnings information. We tested whether continuance of CSR commitments could affect the level of transparency. Our results revealed found that a company with a longer period of CSR activities had higher earnings transparency. This implies that CSR activities on ongoing-basis encourage a company to disclose its information to outside stockholders in an open way.