The Study On The Effect Of The Product Market Competition And Internal Governance On The Performance Of Corporate

As a solution to the modern corporate ownership and control over the separation ofthe institutional arrangements, Corporate governance get most recently for more thanthree decades at the global level by the theoretical and practical attention. But there isno consistent conclusion about the relationship between corporate governance andcorporate performance. With the in-depth study of corporate governance, competition isalso considered as an important part of the corporate governance mechanism. Therefore,it’s important practical significance to explore the relationship between product marketcompetition and internal governance for the improvement of corporate performance.The thesis selects565listed companies in the Shanghai Stock Exchange as aresearch object for three years(2010-2012), and make an empirical analysis on theinfluence of the product market competition and internal governance to corporateperformance by STATA12.0software, especially the measure of product market’sintensity competition.The research selectes a series of financial index which responseproduct market’s profitability, such as entry barriers and ability of reacting to marketconditions. By means of factor analysis,it can obtain aggregative indicator formeasuring product market competition. Based on panel data, the thesis’s empirical studymake clear conclusions.Product market’s competition make a difference to corporateperformance. There is complementary relationship between ownership structure andproduct market, as well as the size of board, the proportion of independent directors, thestatus of chairman and general manager. There is substitute relationship betweendirectors of monetary and product marke’s competition, as well as executives. But bothownership and product market competition is no significant relationship to each other.In a word, the appropriate relationship about them can make conducive to theimprovement of corporate performance.In this paper, we try to provide practical reference for listed company, and givereference Suggestions to improve the level of corporate performance.