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

Abstract

This paper examines how the product market competition under Chinese market conditions affects the quality of information disclosure of listed companies. Based on the data of China A-share listed companies from 2001 to 2014, we find that the improvement of product market competition measured from the industry level and corporate level has a significant negative impact on the quality of information disclosure of listed companies. After further distinguishing the earnings management activities that can change the quality of information disclosure, the results confirm that the increase of product market competition at the industry level will make the listed companies tend to positive earnings management, while the increase at the corporate level will lead to more negative earnings management. In addition, the nonlinear model confirms that both of them have an inverted U-shaped relationship, but there is only a single negative impact of product market competition on the quality of information disclosure under the sample conditions of Chinese listed companies.