Proprietary Costs and Voluntary Segment Disclosure: Evidence from Italian Listed Companies

23 Pages Posted: 24 Nov 2002

See all articles by Annalisa Prencipe

Annalisa Prencipe

Bocconi University - Department of Accounting

Date Written: June 2002


This paper aims to identify some new determinants of the quality of voluntary segment disclosure by using the theoretical framework of Proprietary Costs Theory. The identified new determinants are correspondence between segments and legally identifiable subgroups of companies, level of detail in segment definition, listing status age and growth rate. The paper also provides further evidence to test the impact of some traditional determinants, which are introduced in the model as control variables. The study is carried out in Italy, which proves to be a particularly suitable setting for the analysis because of its limited legal and professional requirements on the topic. To test the hypotheses, a sample of 67 Italian listed companies was selected and a multiple regression model was used. Except for growth rate, all the other new determinants proved to be significantly related to segment reporting quality, consistently to what hypothesized. These results confirm that proprietary costs are particularly relevant for segment reporting, thus limiting the incentive for the companies to provide this information to the market.

Keywords: segment reporting, voluntary disclosure, disclosure quality, Proprietary Costs Theory

JEL Classification: M41, G19, M45

Suggested Citation

Prencipe, Annalisa, Proprietary Costs and Voluntary Segment Disclosure: Evidence from Italian Listed Companies (June 2002). SDA BOCCONI, Research Division Working Paper No 02-75, Available at SSRN: or

Annalisa Prencipe (Contact Author)

Bocconi University - Department of Accounting ( email )

Via Roentgen 1
Milan, 20136

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