The primary focus of this study is to investigate the relation between Earnings Management (EM) and Corporate Social Responsibility (CSR) in the UK. While there are few studies in the existing literature that examined the relationship between EM and CSR, there is a lack of studies examining this relation in the UK. Furthermore, the existing academic literature appears to provide inconsistent results.

These considerations motivate this study to bridge this gap in the literature by providing evidence of whether or not EM and CSR are related in the UK. The present study carried out through three empirical stages based on the data obtained from the FTSE 350 Index between 2008 and 2010.

The first stage examined the EM practice using three EM models to estimate discretionary accruals as proxy for EM. The models were the Jones (1991), modified Jones (Dechow et al. 1995) and performance - matched (Kothari et al. 2005) models.

Firstly, these models were tested using multivariate analysis; the findings revealed that the performance - marched model has been identified as the model that could most accurately measure the presence of EM. Secondly, by applying univariate analysis, the study has found insignificant differences between the high and low EM practices in UK firms and that the highest and the lowest levels of EM were in 2008. Similar results were discovered when comparing the differences between income - increasing and income - decreasing EM.

The second stage tested CSR by applying both content analysis and disclosure index approaches to identify the level of Corporate Social Responsibility Disclosure (CSD) as proxy of CSR. The findings from the content analysis revealed that the employees (EMP) theme had the highest level of CSR information, followed by community (COM), environment (ENV), others (OTH), products and services (PRO), and customers (CUS). Similar results were obtained when the disclosure index approach was employed.

The relationship between EM and CSR was tested in the final stage by using univariate and multivariate analyses. The findings revealed that firms with more CSR information reported lower EM. Further tests were performed to investigate the link between EM and CSR themes and the findings revealed that firms with more information of EMP, COM, EVE and PRO reported lower EM. However, no evidence suggested that CUS and OTH information affect EM. Overall, the findings suggest that the level of CSR improve financial reports’ quality. This study aspires to contribute to our understanding and knowledge on the issue related to the role of CSR regarding the quality of reported earnings.

The paper attempt a closer investigation to re-interpret the role of CSR in limiting the extreme practices in earnings management (EM), using evidence from large UK companies.

.The paper aims to re-interpret the role of corporate social responsibility (CSR) in limiting the extreme practices in earnings management (EM)

We consider a differentiated duopoly where firms invest in research and development (R&D) to reduce their production cost. The objective of this study is to derive and compare Bertrand and Cournot equilibria, and then examine the robustness of the literature's results, especially those of Qiu (1997). We find that The main results of this study are as follows: (a) Bertrand competition is more efficient if R&D productivity is low, industry spillovers are weak, or products are very different. (b) Cournot competition is more efficient if R&D productivity is high and R&D spillovers and products' degree of substitutability are not very small. (c) Cournot competition may lead to higher Outputs, higher consumer surpluses and lower prices, provided that R&D productivity is very high and spillovers and degree of substitutability of firms' products are moderate to high, (d) Cournot competition results in higher R&D Investments compared to Bertrand's. These results show that the relative efficiencies of Bertrand and Cournot equilibria are sensitive to the suggested specifications, and hence far from being robust.

We consider a differentiated duopoly where firms invest in research and development (R&D) to reduce their production cost. We show that if the firms play a one stage game, i.e., they choose R&D and price (in Bertrand game) or quantity (in Cournot game)at the same time, then the usual result stating that Bertrand competition is more efficient than Cournot competition still holds.

Using an infinite-horizon two-player differential game, we derive and compare Bertrand and Cournot equilibria for a differentiated duopoly engaging in the process of R&D competition. The main findings of this study are as follows. First, Bertrand competition is more efficient if either R&D productivity is low or products are very different. Second, Cournot competition is more efficient provided that R&D productivity is high, products are close substitutes, and spillovers are not close to zero. This last result is different from what has been obtained in the literature. Hence, this shows that considering a dynamic model and more general investment costs does have an impact on the efficiency results.