Legal Protection Of Investors、Product Market Competition And Corporate Value

The typical features of a modern company is the separation of ownership andcontrol rights, Principal-agent problem arises. As a solution to principal-agentproblem set of institutional arrangements, corporate governance get most attention bythe theorists and practitioners in the world. Studies have shown that, a good corporategovernance structure should be a organic combination of the internal and externalgovernance mechanisms. After years of exploration and practice, our country’scorporate governance has been greatly improved, but many problems still exist.Current research is focused on how improve the internal governance mechanisms, butignoring the company’s external environment for companies, they have an importantimpact on corporate performance. Therefore, this paper holds that to consider therelationship between legal and competitive external governance mechanisms and thecorporate performance, there is great significance to optimize corporate governancestructure and improve corporate governance performance.In this paper, we sort out the theory of the legal protection of investors andprocduct market competition, then analysis the characteristics of the legal protectionof investors and procduct market competition in the transition period of China’seconomic, on this basis, we analysis the the legal protection of investors and procductmarket competition’s impact on corporate value and the relationship between legalprotection of investors and procduct market competition, propose assumptions,establish regression equation, and use data of China’s A-share listed companies to testthe assumptions. First of all, of the empirical part of the statistical analysis andcorrelation test of variables, then test the legal protection of investors and productmarket competition’s impact on corporate value by regression analysis, and introducethe interaction terms of legal protection of investors and product market competition,in order to further clarify the relationship between legal protection of investors andproduct market competition. The results showed:1、The legal protection of investors affects corporate value. The regression resultsof the legal protection of investors and corporate value show that judicial levelspositively correlated with corporate value, the better legal protection areas, the moreeffective corporate governance, higher value of company.2、Product market competition affects corporate value. The regression results ofproduct market competition and corporate value show that product marketcompetition positively correlated with corporate value, the higer the degree of productmarket competition, the more effective oversight and restraint mechanisms higher value of company.3、By analysis the empirical results of the interaction terms of legal protection ofinvestors and product market competition, we found that compared to the lower areasof the legal protection of investors, product market competition have a greater impacton corporate value in better areas of the legal protection of investors, product marketcompetition played a complementary role on the legal protection of invertors incorporate governance effects. However, the legal protection of investors have noobvious affect on corporate value in different product market competition industries,this shows that the legal protection of investors have little affect on enhence thencorporate governance effects of product market competition.