The Impact of Corporate Social Responsibility Disclousre And Accounting Comparability  on Earnings Persistence of Jordanian And Palestinian Banks For The Years 2012-2022

thamer khaliefa

The Impact of Corporate Social Responsibility Disclousre And Accounting Comparability on Earnings Persistence of Jordanian And Palestinian Banks For The Years 2012-2022

Date

2024-12-04

Authors

thamer khaliefa

Publisher

An-Najah National University

Abstract

This study aimed to analyze the impact of corporate social responsibility disclosure (CSRD) and accounting comparability on earnings persistence in Jordanian and Palestinian banks during the period from 2012 to 2022. A mixed-methods approach was adopted, combining content analysis of CSRD reports and quantitative analysis of banks' financial statements, using statistical tools to examine the relationship between these variables and earnings persistence. To achieve this objective, CSRD and accounting comparability were studied as independent variables, while debt, cash, and bank size were included as control variables, along with inflation and GDP as independent control variables. The study sample included the entire population, consisting of 7 Palestinian banks and 14 Jordanian banks. A multiple linear regression analysis was conducted using panel data. The study yielded several important findings. First, it was found that CSRD has a negative impact on the ability to predict earnings, reflecting an opportunistic perspective where such disclosures may be used to obscure earnings management practices and enhance reputation unethically. The study also showed that accounting comparability plays a positive role in improving the ability to predict earnings, as comparable financial reports enhance transparency and reduce uncertainty, enabling investors and stakeholders to assess banks' financial performance more accurately and fairly. Regarding the control variables, the study found that inflation does not significantly impact earnings predictability, as banks demonstrated flexibility in adapting to price changes through their financial policies and interest rates. In contrast, GDP growth had a significant positive impact, reflecting the level of economic activity and the increased demand for banking services, which enhances earnings stability. However, variables such as capital adequacy, cash liquidity, net interest margin, operational efficiency, and provisioning for loan losses did not show a significant impact on earnings predictability. The study also revealed that higher debt levels negatively affect earnings stability due to financial burdens associated with interest and debt repayment, highlighting the importance of prudent debt management. Additionally, the study showed that bank size significantly impacts earnings predictability, while both current liquidity and dividend yield also have a significant positive effect on earnings persistence. Based on these findings, the study offered several recommendations to enhance earnings stability and predictability. These recommendations included improving transparency in CSRD, enhancing the comparability of financial reports through the adoption of unified accounting standards, optimizing liquidity and debt management, and developing flexible strategies to address GDP fluctuations. Furthermore, the study recommended implementing Basel agreements to strengthen the stability of the banking system through effective risk management and ensuring adequate capital levels, as well as working in coordination with central banks to improve financial and regulatory policies.