명성비용이 가치평가오류에 미치는 영향 = The Effect of Reputational Expenses on Valuation Errors

다국어 초록 (Multilingual Abstract)

[Purpose]This study analyzed the effect of reputation costs on valuation errors. If investors reflect the information on reputation expenditure in future profits, the difference between intrinsic value and market value will eventually be lowered. However, if investors believe that reputation expenditure is simply to lower the possibility of a tax audit by the tax authorities and to mitigate the negative impact of aggressive tax avoidance on corporate value, valuation errors will not increase or significant results will not appear.
[Methodology]In order to achieve the research objectives, 7,867 samples that meet the analysis conditions among companies registered in the stock market (KOSPI) and KOSDAQ (KOSDAQ) from 2013 to 2022 were conducted. For the cost of reputation, as in Hwang Bo－young and Jeong Gyu－eon (2019), the residuals excluding the portion used for marketing compared to sales were used. Valuation errors were used as dependent variables based on the research methodology of Rhodes－Kropf et al. (2005).
[Findings]The empirical analysis results showed a significant negative (－) relationship between reputation costs and valuation errors. This means that reputation costs have the effect of lowering valuation errors. The reason for this result seems to be the result of reducing uncertainty and reflecting it in market value by providing corporate information to the market through communication between managers and investors with the expenditure of reputation costs.
[Implications]There are not many domestic studies verifying the economic effect of reputation costs, and empirical studies on factors affecting valuation errors are insufficient. This study is significant in that it analyzed whether reputation costs provide useful information to lower valuation errors from an investor’s point of view. It also suggests that regulatory agencies related to capital markets can use reputation costs as a basis for policy establishment by recognizing that they can be used to lower valuation errors.