Accouting Information Transparency,Product Market Competition And Firm Value

The emergence of separation between ownership and management right causes more and more serious problems about the information asymmetry in the capital market.As a result,more and more people pay attention to the accounting information transparency or information disclosure of corporation.Increasing transparency of accounting information can improve the quality of information.It can also better help investors understand information of the operating conditions and cash flow from a corporation.Thus,Investors can evaluate precisely the prospect or the future development.Moreover,with the rapid development of economy,the competition among corporations is becoming more and more fierce.The effects of competition on reducing costs and improving efficiency have been concerned and confirmed by economic researchers.However,the effects of supervising management and reducing agency cost have aroused people's attention only in recent decades.Especially in the recent 20 years,product market competition has been taken as an important external governance mechanism.Generally,managers will pay more efforts under a higher degree of product market competition from a industry,It's favor of refraining their lazy behavior,and it's more convenient for shareholders to supervise manager,so as to reduce information asymmetry,alleviate the agency problem,reduce agency cost,and enhance corporate governance.In a word,It plays a positive role in promoting the firm value.This paper is based on predecessors' researches.The sample data of listed companies from Shenzhen Stock Exchange is selected as the research objects,the time series are from 2010 to 2014.And this paper uses the listed company information disclosure rating results that announced by the Shenzhen Stock Exchange as a measure of the transparency of accounting information,uses Herfindahl-hischman index to measure the degree of product market competition,and uses Tobin's Q to measure firm value,and demonstrates the idea for this paper systematically with empirical research method.Firstly,It vertifies the relationship between transparency of accounting information and the firm value,which confirms that the transparency of accounting information is higher,the value is greater.Secondly,It verifies the relationship between the level of product market competition and firm value.Through the multiple regression analysis,we conclude that the product market competition is more fiercer,the firm value is greater.Thirdly,According to the level of product market competition,the sample of this paper is divided for strong competition group,moderate competition group and weak competition group,It verifies the relationship between accounting information transparency and firm value under different levels of competition.Through the research,we find that the relationship between accounting information transparency and the firm value is significantly positive only under strong competition group.But the relationship is positive and not significant under the moderate and weak competition group.Fourthly,According to the nature of property right,we divide these datas into two groups under the level of strong competition group:State-owned corporations and Non-State corporations.Through the research,we find that the accounting information transparency is more significant to enhance the value of the corporation in Non-State corporations,compared with the State-owned corporations.This paper attempts to put product market competition,the transparency of accounting information and firm value together.It has certain innovation.Based on the theory of property rights for the first time,this paper divideds sample datas into State-owned corporations and Non-state corporations.And the next,this paper analyses the relationship between accounting information transparency and the firm value from State-owned corporations and Non-State corporations where product market competition is fierce.It's benefit of analysing how to promote the firm value of State-owned corporations.At last,Based on these results,this paper draws some conclusions and gives some related suggestions.