The Product Market Competition, The Equity Balance Degree And The Quality Of Information Disclosure

Accounting information published by public companies is the main source information for capital market and it plays an important role in reasonable and effective resource allocation. Good information disclosure quality could not only reduce information asymmetry for capital market and improve allocative efficiency of resources, but also could assist external investor to supervise and evaluate company administrative authority as well as reduce moral risk and opportunistic behavior. However, domestic and international accounting scandals are constantly emerging in recent years. False accounting information broke effective resources allocation for stock market, seriously damaged investors’ interests and hindered sound development of capital market. Therefore, how to govern financial fraud and improve accounting information disclosure quality has been the focus with widely concerns from people of all circles.Corporate governance is accompanied by accounting information disclosure with mutual effect and close relationship. Perfect corporate governance mechanism is comprised of internal and external corporate governance mechanism. External market environment could impact on formation of internal corporate governance structure, however internal corporate governance structure could impact on implementation of internal corporate governance mechanism, and effective cooperation of internal and external mechanism could achieve well corporate governance. Hence, we initiate from the view of corporate governance mechanism, to seek for method for improvement of information disclosure quality, and it could well contribute to improve resource allocation efficiency, to reduce information asymmetry and to further facilitate sound development of capital market.It could be observed from existing research literature that most of the scholars have made the unilateral research of the effect from product market competition or ownership structure for accounting information quality, while for joint influence to accounting information quality, few researches were involved. Moreover, as for researches with respect to the information disclosure quality impacted by product market competition, no coincident conclusion has been made by scholars yet. Some researches show that product market competition could properly improve the quality for information disclosure, however some researches deem that disadvantaged costs arisen from competition could lead to quality reduction of information disclosure. Thus, this paper based on the view of information disclosure quality jointly impacted by internal and external governance mechanism, explored correlation among product market competition, ownership restriction and information disclosure quality. First of all, this paper viewed related domestic and international literatures, presented different perspectives from literatures, made literature review and then figured out views and emphasis for this paper. Afterwards, it adopted standard researching methods and theoretically explained influence made by product market competition and ownership restriction on information disclosure quality, and establish theoretical basis for research of relationships among product market competition, ownership restriction and information disclosure quality. At last, based on theoretically analysis, proposed research hypothesis of this paper and proceed empirical research by utilization of Logistic regression model. This paper took main-board companies in A shares of Shenzhen Stock Exchange between 2010 to 2013 as examples, and respectively studied incidence for information disclosure quality made by product market competition and ownership restriction. In addition, it further studied interaction between product market competition and ownership restriction impact on information disclosure quality, and work out that whether they both are in complementary relationship or substitutional relations during the process of effect on information disclosure quality.It is observed in the research results from product market competition effect on information disclosure quality that product market competition is in prominent positive correlation relationship with information disclosure quality, and that is the more intensive product market competition, the higher information disclosure quality. It shows that moderate product market competition environment could proper benefit for improvement of information disclosure quality. While it is observed in the research results from ownership restriction effect on information disclosure quality that ownership restriction is in prominent positive correlation relationship with information disclosure quality as well, and that is the more balanced ownership distribution, the higher information disclosure quality. And it shows that perfect ownership structure could proper benefit for improvement of information disclosure quality. It could also be observed in the research results from the interaction between product competition and ownership effect on information disclosure quality that under the product market competition environment, ownership restriction has more prominent effect in information disclosure quality improvement, compared with non-market competition environment. Thus it can be seen that, perfect inter and external governance mechanism could proper benefit for company information disclosure quality. We could take measures such as improve information disclosure policy, strengthen information disclosure monitoring, improve ownership structure and develop well market competition environment etc. to improve information disclosure quality for domestic public companies.