Information disclosure, corporate financialization, and earnings management

• Higher information disclosure reduces corporate earnings management. • Greater corporate financialization increases earnings management. • Financialization significantly moderates the link between disclosure and earnings management. This study investigated the relationship between information disclosure, corporate financialization, and earnings management using a panel of Chinese listed companies spanning 2015–2023. Notably, higher levels of information disclosure were significantly associated with lower degrees of earnings management, while higher levels of corporate financialization intensified earnings manipulation. Moreover, corporate financialization exerted a significant moderating effect on the relationship between information disclosure and earnings management, weakening disclosure’s governance. Moderating effect analysis demonstrated regional heterogeneity, which is more pronounced in regions with low marketization. By integrating perspectives from agency theory and corporate governance, this research provided new insights into how financialization reshapes the effectiveness of external monitoring mechanisms. The study findings enrich the literature on the governance effects of information disclosure and provide empirical evidence for enhancing regulatory frameworks to ensure financial transparency for mitigating the shift of firms from the real economy to the speculative virtual economy.