Product Market Competition and Accounting Information Comparability

Abstract

Abstract:

The paper measures the accounting information comparability of Chinese listed companies from 2002 to 2012 and then examines the effect of product market competition on accounting information comparability. The empirical results indicate:product market competition and accounting information comparability is negatively correlated, namely, fierce market competition will lead to the management to provide accounting information of low comparability. Consequently, compared to the corporate governance effect, the effect of proprietary cost effect and earnings pressure effect on accounting information comparability plays a leading role. Further examination finds that more R&D expenses will strengthen the proprietary cost effect, low audit quality will strengthen the earnings pressure effect and when the degree of investor protection is strong or in the case of a non state-owned company, the corporate governance effect is weak. Under these three types of circumstances, the negative correlation between product market competition and accounting information comparability is more significant. It also achieves the recognition of proprietary cost effect, earnings pressure effect and corporate governance effect. The results finally pass the robustness test of accounting standards change.

Key words: product market competition, accounting information comparability, proprietary cost effect, earnings pressure effect, corporate governance effect

Yuan Zhizhu, Zhang Xiaoman, Yu Xuehang. Product Market Competition and Accounting Information Comparability[J]. , 2017, 29(10): 234-247.

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