Earnings management and the driving force behind sustainability reporting disclosure in the Jordanian banking industry

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:ESGと利益調整の関連性に関する新興国エビデンスとして、コーポレートガバナンス研究に貢献。

🏢実務担当者:サステナビリティ報告の信頼性向上やグリーンウォッシング防止策の参考になる可能性。

🏛政策担当者:新興国におけるESG開示規制の設計と執行の必要性を示唆。

Purpose The purpose of this study is to explore the relationship between “environmental, social and governance” (ESG) scores and “earnings management” (EM) practices, which act as an indicator for the effectiveness of “corporate governance” monitoring systems. Design/methodology/approach Bank sustainability reports from 2010 to 2024 are assessed with a modified “environmental, social and governance” disclosure index based on earlier research. A representative group of 240 observations of Jordanian banks is used to examine the hypotheses using “Ordinary least squares clustered regression with fixed effect standard error”. To improve the validity of the results, a variety of robustness and extra studies are used, including the use of alternative “environmental, social and governance” reporting measures, the elimination of the 2020 crisis year observations and retesting without control variables. The additional analytical results support the primary research conclusions. Findings The results of this research, as demonstrated by multivariate regression, show that Jordanian banks with more EM practices are more likely to obtain a higher sustainability score. This means that organisations with higher “environmental, social and governance” practices may engage in ESGs to increase information openness and attract investors who value sustainability disclosures and ethical investments. Each of the three foundational components of sustainability reporting supports this conclusion. Practical implications This research has various implications for practice for organisations, politicians and stakeholders. A considerable favourable correlation was found between “earnings management” practices and sustainability ratings. Thus, the findings encourage politicians and regulators to pass legislation that supports sustainability practice monitoring and emphasises company openness and participation. By providing assurance from an impartial third party with stringent duties, the findings may help regulatory bodies and policymakers boost sustainability reporting credibility. Institutional encouragement and confidence in professional pressure are required to develop sustainability reporting reliability and comparability standards. Jordan may increase fines for unauthorised sustainability buildings and combine federal advice with voluntary industry measures to maximise economies of scale and reduce transformation costs. Originality/value This paper investigates whether “earnings management” practices can increase sustainability scores using data from Jordan, a developing nation. Previous research has demonstrated that increasing global economic trends necessitate additional research on “Corporate social responsibility/environmental, social and governance” programmes in developing countries and profound sociocultural gaps between developed and developing nations. To the best of the authors’ knowledge, this is the first study to look into how “earnings management”, one of the most important indicators of “corporate governance” supervision, affects one of the most recent disclosure requirements in the modern era, sustainability reporting, using new data from Jordan.

• openaire https://doi.org/10.1108/ijlma-04-2025-0150first seen 2026-05-05 19:08:44