Breaking it Down: Economic Consequences of Disaggregated Cost Disclosures

Published Online:https://doi.org/10.1287/mnsc.2023.4780

References

  • Ali A, Klasa S, Yeung E (2014) Industry concentration and corporate disclosure policy. J. Accounting Econom. 58(2–3):240–264.CrossrefGoogle Scholar
  • Anton JJ, Yao DA (2004) Little patents and big secrets: Managing intellectual property. RAND J. Econom. 35(1):1–22.CrossrefGoogle Scholar
  • Athey S, Schmutzler A (1995) Product and process flexibility in an innovative environment. RAND J. Econom. 26(4):557–574.CrossrefGoogle Scholar
  • Bae B-H, Han E-J, Choi C-H, Noh Y-S, Shin J-H, Li L (2013) The effect of voluntary disclosure of the schedule of manufacturing cost on cost of debt. Tax Accounting Res. 37:25–43.Google Scholar
  • Barrios J, Lisowsky P, Minnis M (2019) Measurement matters: Financial reporting and productivity. Working paper, University of Chicago, Chicago, IL.Google Scholar
  • Barth ME, Landsman WR, Taylor DJ (2017) The JOBS Act and information uncertainty in IPO firms. Accounting Rev. 92(6):25–47.CrossrefGoogle Scholar
  • Bens DA, Berger PG, Monahan SJ (2011) Discretionary disclosure in financial reporting: An examination comparing internal firm data to externally reported segment data. Accounting Rev. 86(2):417–449.CrossrefGoogle Scholar
  • Berger PG, Hann RN (2003) The impact of SFAS No. 131 on information and monitoring. J. Accounting Res. 41(2):163–223.CrossrefGoogle Scholar
  • Berger PG, Hann RN (2007) Segment profitability and the proprietary and agency costs of disclosure. Accounting Rev. 82(4):869–906.CrossrefGoogle Scholar
  • Bernard D, Blackburne C, Thornock J (2020) Information flows among rivals and corporate investment. J. Financial Econom. 136(3):760–779.CrossrefGoogle Scholar
  • Bhojraj S, Bloomfield RJ, Jang Y, Yehuda N (2021) Cost structure, operating leverage, and CDS spreads. Accounting Rev. 96(5):79–105.CrossrefGoogle Scholar
  • Bloom N, Schankerman M, Van Reenen J (2013) Identifying technology spillovers and product market rivalry. Econometrica 81(4):1347–1393.CrossrefGoogle Scholar
  • Breuer M (2021) How does financial-reporting regulation affect industry-wide resource allocation? J. Accounting Res. 59(1):59–110.CrossrefGoogle Scholar
  • Breuer M, Leuz C, Vanhaverbeke S (2022) Reporting regulation and corporate innovation. NBER Working Paper No. 26291, National Bureau of Economic Research, Cambridge, MA.Google Scholar
  • Campbell TL II, Keys PY (2002) Corporate governance in South Korea: The chaebol experience. J. Corporate Finance 8(4):373–391.CrossrefGoogle Scholar
  • Cassiman B, Veugelers R (2006) In search of complementarity in innovation strategy: Internal R&D and external knowledge acquisition. Management Sci. 52(1):68–82.LinkGoogle Scholar
  • Chircop J, Collins DW, Hass LH, Nguyen NQ (2020) Accounting comparability and corporate innovative efficiency. Accounting Rev. 95(4):127–151.CrossrefGoogle Scholar
  • Choi J-S (2014) Proposal for the invigoration of securities class action system. Korean Law Rev. 53:311–333.Google Scholar
  • Choi S (2018) Chungnam police report, director accused of handing the information about the production process of artificial marble to competitor. Chungnamilbo (February 27). Accessed April 18, 2023, http://www.newstnt.com/news/articleView.html?idxno=11499.Google Scholar
  • Chun H, Nadiri MI (2008) Decomposing productivity growth in the U.S. computer industry. Rev. Econom. Statist. 90(1):174–180.CrossrefGoogle Scholar
  • Clark KB, Griliches Z (1984) Productivity growth and R&D at the business level: Results from the PIMS database. Griliches Z, ed. R&D, Patents, and Productivity (University of Chicago Press, Chicago), 393–416.Google Scholar
  • Dambra M, Field LC, Gustafson MT (2015) The JOBS Act and IPO volume: Evidence that disclosure costs affect the IPO decision. J. Financial Econom. 116(1):121–143.CrossrefGoogle Scholar
  • Dedman E, Lennox C (2009) Perceived competition, profitability and the withholding of information about sales and the cost of sales. J. Accounting Econom. 48(2–3):210–230.CrossrefGoogle Scholar
  • De Groote X (1994) Flexibility of production processes: A general framework. Management Sci. 40(7):933–945.LinkGoogle Scholar
  • Di Tella R, Rodrik D (2020) Labour market shocks and the demand for trade protection: Evidence from online surveys. Econom. J. 130(628):1008–1030.Google Scholar
  • Elliott JA, Hanna JD (1996) Repeated accounting write-offs and the information content of earnings. J. Accounting Res. 34(Supplement):135–155.CrossrefGoogle Scholar
  • Ettredge ML, Kwon SY, Smith DB, Zarowin PA (2005) The impact of SFAS No. 131 business segment data on the market’s ability to anticipate future earnings. Accounting Rev. 80(3):773–804.CrossrefGoogle Scholar
  • Fama EF, French KR (1995) Size and book-to-market factors in earnings and returns. J. Finance 50(1):131–155.CrossrefGoogle Scholar
  • Fama EF, French KR (2006) Profitability, investment and average returns. J. Financial Econom. 82(3):491–518.CrossrefGoogle Scholar
  • FASB (2021) Feedback. Accessed December 19, 2021, https://fasb.org/document/blob?fileName=AGENDACONSULT-_bmho_-20211215.pdf.Google Scholar
  • FASB (2022) Financial performance reporting—Income statement expenses. Accessed July 1, 2022, https://www.fasb.org/Page/ProjectPage?metadata=fasb-Disaggregation%E2%80%94IncomeStatementExpenses-022820221200.Google Scholar
  • Fetter TR, Steck A, Timmins CD, Wrenn DH (2018) Learning by viewing? Social learning, regulatory disclosure, and firm productivity in shale gas. NBER Working Paper No. 25401, National Bureau of Economic Research, Cambridge, MA.Google Scholar
  • Frankel R, Kothari SP, Weber J (2006) Determinants of the informativeness of analyst research. J. Accounting Econom. 41(1–2):29–54.CrossrefGoogle Scholar
  • Gassen J, Muhn M (2023) Financial transparency of private firms: Evidence from a randomized field experiment. Working paper, Humboldt University of Berlin, Berlin, Germany.Google Scholar
  • Glaeser S, Omartian JD (2022) Public firm presence, financial reporting, and the decline of US manufacturing. J. Accounting Res. 60(3):1085–1130.CrossrefGoogle Scholar
  • Hail L, Tahoun A, Wang C (2018) Corporate scandals and regulation. J. Accounting Res. 56(2):617–671.CrossrefGoogle Scholar
  • Hainmueller J (2012) Entropy balancing for causal effects: A multivariate reweighting method to produce balanced samples in observational studies. Political Anal. 20(1):25–46.CrossrefGoogle Scholar
  • Hall CM (2016) Does ownership structure affect labor decisions? Accounting Rev. 91(6):1671–1696.CrossrefGoogle Scholar
  • Hann RN, Kim H, Wang W, Zheng Y (2020) Information frictions and productivity dispersion: The role of financial reporting quality. Accounting Rev. 95(3):223–250.CrossrefGoogle Scholar
  • Harris MS (1998) The association between competition and managers’ business segment reporting decisions. J. Accounting Res. 36(1):111–128.CrossrefGoogle Scholar
  • Hoberg G, Phillips G (2016) Text-based network industries and endogenous product differentiation. J. Political Econom. 124(5):1423–1465.CrossrefGoogle Scholar
  • Holzhacker M, Krishnan R, Mahlendorf MD (2015) Unraveling the black box of cost behavior: An empirical investigation of risk drivers, managerial resource procurement, and cost elasticity. Accounting Rev. 90(6):2305–2335.CrossrefGoogle Scholar
  • Hughes JS, Pae S (2015) Discretionary disclosure, spillovers, and competition. Rev. Accounting Stud. 20:319–342.CrossrefGoogle Scholar
  • Huh W (2017) All the articles about iPhone X costs that you read are inaccurate. HuffPost (November 28). Accessed April 18, 2023, https://www.huffingtonpost.kr/news/articleView.html?idxno=61221.Google Scholar
  • Hwang I, Hong J (2004) Eleven proprietary statements won’t need to be disclosed from next year. Maeil Bus. Newspaper.Google Scholar
  • IASB (2021) Principles of aggregation and disaggregation and roles of the primary financial statements and the notes. Accessed July 1, 2022, https://www.ifrs.org/content/dam/ifrs/meetings/2021/april/iasb/ap21a-primary-financial-statements.pdf.Google Scholar
  • Jaffe AB (1988) Demand and supply influences in R&D intensity and productivity growth. Rev. Econom. Statist. 70(3):431–437.CrossrefGoogle Scholar
  • Jin Y (2011) 11 Billion won worth of trade secret was handed to a competitor by a former CJ manager. Seoul Economic Daily (February 7). Accessed April 18, 2023, https://www.sedaily.com/NewsView/1HKXI65BFN.Google Scholar
  • Jorgenson DW (1991) Productivity and economic growth chapter. Berndt ER, Triplett JE, eds. Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth (University of Chicago Press, Chicago), 19–118.Google Scholar
  • Kallapur S, Eldenburg L (2005) Uncertainty, real options, and cost behavior: Evidence from Washington state hospitals. J. Accounting Res. 43(5):735–752.CrossrefGoogle Scholar
  • Kim M-O, Jung H-R (2011) Voluntary disclosure of the schedule of manufacturing cost. J. Taxation Accounting 12(4):207–243.Google Scholar
  • Kim M, Jung H, Choi Y, Lee H (2016) A study on the determinants of voluntary disclosure of the schedule of manufacturing costs. Korean Accounting J. 25(1):1–33.Google Scholar
  • Koh PS, Reeb DM (2015) Missing R&D. J. Accounting Econom. 60(1):73–94.CrossrefGoogle Scholar
  • Kuziemko I, Norton MI, Saez E, Stantcheva S (2015) How elastic are preferences for redistribution? Evidence from randomized survey experiments. Amer. Econom. Rev. 105(4):1478–1508.CrossrefGoogle Scholar
  • Lang M, Sul E (2014) Linking industry concentration to proprietary costs and disclosure: Challenges and opportunities. J. Accounting Econom. 58(2–3):265–274.CrossrefGoogle Scholar
  • Lee K (2014) Cost structure is proprietary. disclosing cost structure means starting a war with disclosing our strategy. JoongAng Sunday (January 5). Accessed April 18, 2023, https://www.joongang.co.kr/article/13559810.Google Scholar
  • Levinsohn J, Petrin A (2003) Estimating production functions using inputs to control for unobservables. Rev. Econom. Stud. 70(2):317–341.CrossrefGoogle Scholar
  • Li X (2010) The impacts of product market competition on the quantity and quality of voluntary disclosures. Rev. Accounting Stud. 15:663–711.CrossrefGoogle Scholar
  • Li Y, Lin Y, Zhang L (2018) Trade secrets law and corporate disclosure: Causal evidence on the proprietary cost hypothesis. J. Accounting Res. 56(1):265–308.CrossrefGoogle Scholar
  • Numan W, Willekens M (2012) An empirical test of spatial competition in the audit market. J. Accounting Econom. 53(1–2):450–465.CrossrefGoogle Scholar
  • Oh H, Park S, Jeon H (2017) Effects of voluntary disclosure of the schedule of manufacturing cost on analysts’ earnings forecasts: Evidence from Korea. J. Appl. Bus. Res. 33(3):623–636.CrossrefGoogle Scholar
  • Olley GS, Pakes A (1996) The dynamics of productivity in the telecommunications equipment industry. Econometrica 64(6):1263–1297.CrossrefGoogle Scholar
  • Piotroski JD (2000) Value investing: The use of historical financial statement information to separate winners from losers. J. Accounting Res. 38(Supplement):1–41.CrossrefGoogle Scholar
  • Raith M (2003) Competition, risk, and managerial incentives. Amer. Econom. Rev. 93(4):1425–1436.CrossrefGoogle Scholar
  • Riedl EJ, Srinivasan S (2010) Signaling firm performance through financial statement presentation: An analysis using special items. Contemporary Accounting Res. 27(1):289–332.CrossrefGoogle Scholar
  • Sadovi MW (2022) Unpacking crypto and FASB’s new priorities with Richard Jones. CFO Dive (July 18). Accessed July 20, 2022, https://www.cfodive.com/news/goodwill-crypto-fasb-accounting-priorities-richard-jones/627317/.Google Scholar
  • Shumway T (2001) Forecasting bankruptcy more accurately: A simple hazard model. J. Bus. 74(1):101–124.CrossrefGoogle Scholar
  • Stigler GJ (1947) Trends in output. Trends Output Employment I:6–31.Google Scholar
  • Syverson C (2004) Market structure and productivity: A concrete example. J. Political Econom. 112(6):1181–1222.CrossrefGoogle Scholar
  • Syverson C (2011) What determines productivity? J. Econom. Literature 49(2):326–365.CrossrefGoogle Scholar
  • Tomar S (2023) Greenhouse gas and emissions benchmarking. J. Accounting Res. 61(2):451–492.Google Scholar
  • Tomy RE (2019) Threat of entry and the use of discretion in banks’ financial reporting. J. Accounting Econom. 67(1):1–35.CrossrefGoogle Scholar
  • Vashishtha R (2014) The role of bank monitoring in borrowers’ discretionary disclosure: Evidence from covenant violations. J. Accounting Econom. 57(2–3):176–195.CrossrefGoogle Scholar
  • Verrecchia RE, Weber J (2006) Redacted disclosure. J. Accounting Res. 44(4):791–814.CrossrefGoogle Scholar
  • Yang J-g (2012) Are analysts forecasts ‘inaccurate’? … Because of withholding manufacturing cost reports. AjuNews (December 20). Accessed April 18, 2023, https://www.ajunews.com/view/20121220000382.Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.