MD&A 비정상적 기술과 미래 기업 성과와의 관련성에 관한 연구

This study examines whether managers control the textual descriptiveness of non-financial disclosures by studying the relationship between the degree of textual descriptiveness and future firm performance. We classify MD&A(Management Discussion and Analysis) text modifications into normal and abnormal descriptions, investigating their impact on future performance in light of the firm’s disclosure environment. According to the obfuscation hypothesis, managers may choose opaque disclosure to avoid the risks associated with full disclosure, or strategically disclose information they wish to conceal to hinder investor decision-making. The abnormal description represents a deviation from the normal description level of the same industry, aiming to grasp both the incentive for managers to conceal information(under-description) and factors aiming to increase information processing costs(over-description). We observe a negative association between abnormal textual description in MD&A and future firm performance. Notably, this was more prominent in small-sized firms, firms listed on KOSDAQ, firms with a low foreign ownership ratio, and firms without an audit committee. Firms with low visibility have less pressure for clarity, and those with weaker monitoring face fewer checks against manager opportunism. Further analysis confirms that these abnormal descriptions affect long-term investor decisions, potentially as a means to delay market reactions by pre-empting negative news. This study indirectly indicates that managers may manipulate non-financial MD&A disclosures strategically.