Does National Culture Moderate the Relationship between CEO Characteristics and Accounting Conservatism? Evidence from SBF120

Abstract

This research aimed to examine the relationship between Chief Executive Officer (CEO) characteristics and accounting conservatism and whether national culture moderates this relationship. The sample consisted of 672 observations from French industrial and service companies listed on the SBF 120 from 2015 to 2022. The collected data were analyzed using SPSS software. To explore the moderating effect of national culture on the relationship between CEO characteristics and accounting conservatism, we applied the feasible generalized least squares (FGLS) to panel data. The results show that CEOs with greater experience and skills are positively and significantly associated with accounting conservatism. Furthermore, consistent with the arguments of the upper echelons theory, the results show that, on the one hand, the seniority of the CEO is positively and significantly associated with accounting conservatism and, on the other hand, education, age, and compensation of CEOs are positively but insignificantly associated with accounting conservatism. Furthermore, the results show that the moderating variable (national culture) positively affects the relationship between CEO characteristics and accounting conservatism.