Corporate social responsibility, family ownership and earnings management: the case of Indonesia

Purpose This paper aims to examine the association of corporate social responsibility (CSR), family ownership and earnings management. Design/methodology/approach The authors specifically examine mining companies listed in Indonesia Stock Exchange during 2012-2014. Total observations are 105 firm-years. Research data are collected from sustainability reports, annual reports and annual financial statements. Data are analysed using panel data regression. Findings The evidence suggests a negative association between corporate social responsibility disclosures (CSRDs) and earnings management. The authors also examine the direct and moderating role of family ownership. The authors find a positive association between family ownership and earnings management. In addition, family ownership strengthens the negative association between CSR and earnings management. Originality/value Previous studies have mainly focussed on companies in the USA. This paper adds to the body of knowledge regarding whether the positive relationship between family ownership and CSR is also present outside the USA, especially in emerging countries. Further, this study examines the effect of family ownership on the association of CSR and earnings management, which rarely examined in previous studies.