Corporate governance and corporate carbon disclosures: The moderating role of earnings management

Abstract

AbstractThis research aims to explore the relationship between corporate governance (CG) and carbon disclosure (CD) and the moderating role of earnings management (EM) in this relationship. The model was built based on legitimacy theory, upper echelons theory, and agency theory. We employed a two‐step generalized method of moments (GMM) regression and conducted robust tests to reaffirm the results using panel data from 134 listed companies in the Vietnamese stock market from 2015 to 2022. Our findings indicate that larger board sizes, boards with more independent members or the presence of a CEO who concurrently serves as the chairman of the board can potentially decrease the likelihood of CD, while companies with a higher proportion of female board members or regular board meetings may tend to publish more carbon information. Furthermore, EM can moderate the relationship between CG and CD, and this variable exhibits high reliability in the model. This research adds to the vast body of existing knowledge about the effectiveness of CG by investigating how different dimensions of CG affect corporate CDs in Vietnam, especially, to the best of the authors' knowledge, this is the first research attempting to provide the empirical result of the moderating role of EM in the relationship between CG and corporate CDs.