Earnings Management and ESG Performance in Gulf Cooperation Council Banks: A Multi-Method Analysis of Relationship Complexity

Sedki Zaiane, Jihene Tizaoui — Fri, 14 Nov 2025 12:07:21 +0300

This study investigates the complex, non-linear relationship between Earnings Management (EM) and ESG performance in banks operating in Gulf Cooperation Council (GCC) countries. Using a multi-method approach (Quantile, Threshold, and Quantile-on-Quantile Regression) on data from 2010–2024, we find that EM most severely harms median-ESG performers, exhibits a sharp negative impact beyond a specific threshold, and is highly asymmetric—greatest when high EM combines with low-medium ESG. The analysis of ESG by individual pillar shows social performance drives this sensitivity, governance reveals a negative cycle, and environmental performance is neutral. These results challenge one-size-fits-all regulation, advocating for targeted oversight based on a bank's specific ESG and financial reporting profile.

Препринты НИУ ВШЭ

Earnings Management and ESG Performance in Gulf Cooperation Council Banks: A Multi-Method Analysis of Relationship Complexity