scholarly journals Does Product Market Competition Improve the Quality of Information Disclosure of Listed Companies? Empirical Evidence Based on China A-Share Market

2018 ◽  
Author(s):  
Huanyu Zhou
Keyword(s):  
Empirical Evidence ◽  
Information Disclosure ◽  
Market Competition ◽  
Product Market ◽  
Listed Companies ◽  
Product Market Competition ◽  
Evidence Based ◽  
Quality Of Information ◽  
A Share

The nexus between product market competition and the quality of analysts’ forecasts: empirical evidence from Chinese-listed firms

2020 ◽  
Vol 14 (1) ◽  
pp. 15-30
Author(s):  
Amjad Iqbal ◽  
Khalil Jebran ◽  
Muhammad Umar
Keyword(s):  
Empirical Evidence ◽  
Market Competition ◽  
Positive Association ◽  
Product Market ◽  
State Ownership ◽  
Product Market Competition ◽  
Future Research ◽  
Manufacturing Companies ◽  
Content Type

Purpose This study aims to explore the relationship between product market competition (competition hereafter) and the quality of analysts’ forecasts. Design/methodology/approach This study uses industry-level (i.e. Herfindahl–Hirschman index), as well as firm-level (i.e. Lerner index) measures of competition and uses forecast accuracy and forecasts dispersion as proxies for analysts’ forecast quality. Further, this study considers a sample of Chinese-listed manufacturing companies for the period spanning 2005 to 2016 and uses various estimation techniques to empirically test the hypothesized relationship. Findings The results show that firms in highly competitive industries are characterized by greater accuracy and smaller dispersion in forecasts. Further, this positive association is more pronounced in SOEs as compared to NSOEs, and in industries characterized by intense competition. The sensitivity analysis further endorses the main results. Practical implications Presenting theoretical and empirical evidence, this study suggests that regulatory bodies should take steps to promote the competitive environment in China. This can help financial analysts in developing more accurate and reliable forecasts and ultimately can bring informational efficiency to the market. Finally, investors would be able to perform their business valuation process in a better way and make economic-useful decisions regarding their capital resource allocation. Originality/value The contribution of the current research is threefold: first, it adds to the limited literature available on this specific topic; second, this study examines the issue in China and further single out the influence of state-ownership and intensity of competition on the relation between competition and forecast properties; and third, this study provides theoretical arguments for the positive association between competition and forecasts quality while setting directions for future research on the topic and suggests the potential channels such as the reporting quality channel and the information disclosure channel that need to be explored further, to better understand the mechanism where competition influences the quality of analysts’ forecasts.

Help or resistance? Product market competition and water information disclosure: evidence from China

2019 ◽  
Vol 11 (5) ◽  
pp. 933-962
Author(s):  
Zhifang Zhou ◽  
Tao Zhang ◽  
Jiachun Chen ◽  
Huixiang Zeng ◽  
Xiaohong Chen
Keyword(s):  
Information Disclosure ◽  
Market Competition ◽  
Product Market ◽  
Product Market Competition ◽  
Competition Intensity ◽  
Ownership Type ◽  
Content Type ◽  
Industry Competition ◽  
The Government ◽  
The Relationship

Purpose This paper investigates the relationship between product market competition and firms’ water information disclosure and how firms’ ownership type can affect this relationship in China, offering new insights into corporate water management. Design/methodology/approach The authors investigated 303 Chinese listed companies in highly water-sensitive industries to examine how product market competition influences corporate water information disclosure by subdividing the product market competition into market competition at the firm level and the industry competition intensity at the industry level. Findings The results show that there exists an inverted U-shaped relationship between industry competition and water information disclosure; enterprises with the highest market power in a mildly competitive industry are more willing to voluntarily disclose water information and play an industry benchmarking role. Further tests demonstrate that the relationship between industry competition intensity and water information disclosure is stronger for state-owned enterprises than for private enterprises. Research limitations/implications The current water resources regulations in China are relatively lax and the water risk awareness of firms is weak, which may affect the applicability of the results. In addition, water information disclosure research is a relatively new field and a quantitative index system for water information disclosure is still in the exploratory stage. Further developments, including the selection, definition and measuring methods of a water index are required. Practical implications The authors developed a new direction of enterprise water management activities from the perspective of market competition. Based on the market conditions in China, the authors also investigated the impact of the ownership type of the enterprises on the relationship between market competition and water information disclosure. Social implications The authors suggested that the government should improve laws and regulations and adopt incentive mechanisms to encourage enterprises to implement water resource management. In addition, the government should encourage high market status enterprises to actively fulfill their environmental responsibilities so that the entire industry is encouraged to follow suit. Originality/value This study represents an important development in the field of environmental accounting and is the first research on corporate water information disclosure; it also extends the research on the influence mechanisms of market competition on the environmental management practices of enterprises.

Modeling product market competition and reporting quality: the transitional economy of China

2017 ◽  
Vol 43 (2) ◽  
pp. 154-166 ◽  
Author(s):  
Amjad Iqbal ◽  
Zia-ur-Rehman Rao ◽  
Muhammad Zubair Tauni ◽  
Khalil Jebran
Keyword(s):  
Market Competition ◽  
Reporting Quality ◽  
Product Market ◽  
Transitional Economy ◽  
Product Market Competition ◽  
Absolute Level ◽  
Content Type ◽  
The Absolute

Purpose The purpose of this paper is to examine the role of product market competition in shaping a firm’s reporting quality (RQ). Design/methodology/approach This research uses an aggregate measure of a firm’s RQ, considering both the absolute level of discretionary accruals (DA) and the quality of accruals, using modified Jones model and Francis et al. (2005) accruals quality model, respectively. Whereas, the Herfindahl-Hirschman index and the Lerner index are used to measure product market competition. Further, this study considers the transitional economy of China and employs panel data estimation techniques for testing the hypothesized relationships. Findings This study finds that firms operating in more competitive industries are associated with higher RQ. This association still prevails when analysis is done using the component measures of RQ (i.e. the absolute level of DA and the quality of accruals). Overall, the empirical results provide evidence on the disciplining role of product market competition among Chinese firms. Practical implications Given the complex governance structures and specific kind of agency problems in Chinese corporations, this study suggests that product market competition may play an external disciplining role to improve the corporate information environment. Originality/value This research explores the role of product market competition for a firm’s RQ in Chinese-listed companies, while the prior studies on the same topic are mostly from the developed countries.

The impact of product market competition on stock price crash risk

2020 ◽  
Vol 35 (7) ◽  
pp. 1141-1153
Author(s):  
Jia Li ◽  
Zhengying Luo
Keyword(s):  
Stock Price ◽  
Market Competition ◽  
Product Market ◽  
Listed Companies ◽  
Product Market Competition ◽  
Crash Risk ◽  
Competitive Position ◽  
Content Type ◽  
Industry Competition ◽  
The Impact

Purpose The purpose of this paper is to explore the impact of product market competition on the risk of stock price crash based on the degree of industry competition and the competitive position of enterprises. Design/methodology/approach This paper chooses the data of Shanghai and Shenzhen A-share listed companies from 2009 to 2017 as samples and uses a threshold regression model to explore the impact of product market competition on the risk of a stock price crash. Findings The results show that: the overall level of industry competition is negatively correlated with the risk of stock price crash; the competitive position of enterprises and the risk of a stock price crash. The correlation is not significant: for high competitive enterprises, the degree of industry competition is negatively correlated with the risk of stock price crash; for low competitive enterprises, the degree of industry competition is positively correlated with the risk of a stock price crash and the conclusions obtained have passed the robustness test. Originality/value This paper not only enriches the literature on the relationship between product market competition and the risk of stock price crash but also has reference significance for supervisors to allocate resources to supervise information disclosure of listed companies.

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