Research On The Relationship Between Product Market Competition、Equtiy Structure And Corporate Performance

A company of good governance is the joint action that the internal governancemechanisms and external governance mechanisms work together.Both product marketcompetition and equity structure are important corporate governace variables,manyscholars have paid attention to them,but conclusion of their researches are notconsistent.They may ignore that the internal governacne mechanisms are born in acertain extern environment,both them can interact each other.Equity structure is thefoundation of inernal corporate governace,it is also born in a certain environment ofproduct market competition,so they would inevitable interact each other.Especiallysuch as China which is in the priod of transition economy, the legal system is not fullyoperated,external market environment is not perfectd and most listed companytranslate from stated-owned enterprise,can product market competition improve theperformance of company? Which kind of equity structure is suitable for China? Howdo the interaction of product market competition and equity structure inflect theperformance of company? The research of these questions is of realistic significance.For the product market competition,The paper fouces on the macroscopic level ofcompetition.After comprehensive comparison with all kinds of indexs,the paper use theHHI idex to measure the level of market product competition.With a panle date ofmanufacturing firm listed on the shanghai Stock Exchang and Shenzhen Stock Exchangover the years2007-2010,based on studying the effect of product market competitionand equity structure on firm performance,we further study the interaction betweenproduct market competition and equity structure.The empirical study shows:（1）Product market competition has a positive and significant impact on corporateperformance,namely higher product market competition can improve the corporateperformance（;2）The concentration of ownership structure has a positive and impact oncorporate performance,so is the ownership′s balance degree,there is no evidence toprove interaction between executive stockholding and corporate performance;（3）Themoderated concentration of ownership structure and product market competition tendto reinforce each other,as to concentration of ownership′s balance degree,it also havethe similar interactions between product market competition.When the coporate is ofhighly concentration, higher degree of product market product can undmine thecorporate performance.as to dispersed concentration of ownership structure and executive stockholding,we don not find significant interaction between them andproduct market competition.To sum up,not only product market competition and equitystructure effect corporat performance respectively,but also interact each other.Acoording the empirical result,the paper concludes with recommendation:break themonopoly to establish a fair and effective environment of product market competition,establish a reasonable equity structure, pay equal attention to competition and equitystructure and so on.