유통비를 이용한 이익조정 가능성이 초과이익의 가치관련성에 미치는 영향

The purposes of this study are to examine how distribution costs, the last bastion for costreduction affects excess earnings relevance and whether that relation between two is affected byfirm's growth potential. The study period is 6 years, from 2006 to 2011 and samples are firms of2,225 which met the special conditions in manufacturing. The findings are as follows: First, it seems that using distribution costs for earnings managementdo not good to enhance earnings relevance, but rather to drop it. This result may be inferred thatinvestors evaluated earnings relevance poor because increased excess earnings by earningsmanagement using distribution costs have not future positive information. Second, it may be appeared that firm's growth potential have an additional influence on therelation between earnings management and excess earnings relevance. Firm's growth potential can besubdivided into growth rate and level. From analyses, it suggests that excess earnings by abnormalreduction of distribution cost in firms with high growth rate has the future positive information,while that of firms with high growth level has not that due to pre-reflection of growth levelinformation in market more of dropping earnings relevance. However, these above results vary withindustries and therefore there will be a need to explore the effect of earnings management usingdistribution costs with a consideration of characteristics of industries. Meanwhile, this study have thelimitation that estimation of Roychowdhury(2006) still might include measurement errors caused byomitted variables and only outside distribution costs were analyzed in this study.