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Research examines how financial reporting quality influences cost behaviour in firms, suggesting important implications for management.
In this research, we examine how peers' financial reporting quality affects a focal firm's asymmetric cost behaviour. We find that the degree of cost stickiness intensifies with the enhancement of financial reporting quality among peer firms. We confirm that this main result is robust even conducting several robustness tests. Overall, our findings indicate that peers' financial reporting can be an important factor affecting cost management decisions.
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Jeon et al. (2026) studied this question.
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