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A study on the relationship between proprietary information cost and the quality of disclosure

  • Kim, Ki Beom (Department of Business Administration, Mokpo National University) ;
  • Lee, Han Geun (Department of Business Administration, Mokpo National University)
  • Received : 2022.07.28
  • Accepted : 2022.08.05
  • Published : 2022.08.31

Abstract

Examining whether the relationship between proprietary information cost and management's disclosure decision is also valid for domestic companies is expected to provide meaningful implications for investors and regulatory authorities. However, there are no domestic studies related to proprietary information costs so far. This study examines whether managers tend to lower the disclosure level at their discretion in consideration of proprietary information costs. This study used the measurement quality of disclosure to examine whether managers tend to lower the disclosure level at their discretion in consideration of proprietary information costs. As a result of empirical analysis, it was confirmed that there is a negative relationship between proprietary information cost and the quality of disclosure. This suggests that management tends to make disclosure decisions in consideration of not only the benefits of disclosure but also proprietary information costs resulting from disclosure in order to maximize corporate value. These findings are expected to have significant implications for investors and related policy authorities.

Keywords

References

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