Business Strategy and the Environment, Journal Year: 2023, Volume and Issue: 32(7), P. 5025 - 5043

Published: March 23, 2023

Abstract The energy sector plays a crucial role in facilitating the low‐carbon transition. However, absence of appropriate environmental regulation, managerial opportunistic behavior firms can manipulate ethical investor perceptions and hinder real transition process towards clean energy. Using Chinese listed as research setting, this paper examines impact attention on firms' earnings management practices. In both traditional firms, results show significant U‐shaped association between management, with curve for being smoother. This relationship is more pronounced larger size weaker external monitoring. Moreover, mediating analysis shows that internal control quality transmits onto practices sector. Our key findings remain robust to battery robustness tests endogeneity controls. Therefore, given growing sector, study extends existing literature by analyzing nonlinear effect provides practical implications curbing activities guiding making sustainable investments, thereby promoting development.

Language: Английский