However,
growth is known to be associated with cost of capital regard less of whether earnings of high growth firms lack transparency.
Asaresult,variationinourearningstransparencymeasureislikelycorrelatedwithintertemporalchanges
and cross-sectionaldifferencesinfirmfundamentalssuchasgrowth.Therefore,detectingarelationbetweenourearnings
transparency measureandcostofcapitalcouldbeattributabletoearningstransparencyorsuchfirmfundamentals.To
address thispossibility,ourtestsincludecontrolsforgrowthandotherfirmfundamentalsthatareknowntobeassociated
with costofcapital.