Abstract

In the case of Korea, the control－ownership disparity is very high as large corporations appropriate the necessary funds from outside. This study has practically analyzed in various ways whether or not the control－ownership disparity influences the transparency of financial reporting as well as book－tax income differences by using the business unit data of Korea for the period of 2004～2007. The results have yielded a conflicting finding in terms of the status depending on whether or not the control－ownership disparity exceeds 50%. In the group with more than 50% of control－ownership disparity, we could see that the impact on the transparency of financial reporting due to the control－ownership disparity seemed to vary with the listing status of the corporation.

Keywords

• Control‐ownership disparity
• Book‐tax income differences
• Transparency of financial reporting
• Corporate governance

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