Research On Product Market Competition,Internal Control And Information Disclosure Violation

Information disclosure is the soul of capital market,but its governance is a worldwide problem.China is an emerging capital market,but information disclosure violations are prominent.With the intensification of global market competition,as an external governance mechanism,the impact of product market competition on information disclosure has attracted academic attention.Unfortunately,most of the researches on the influencing factors of information disclosure violation focus on the internal governance mechanism such as corporate governance structure and financial status,while the researches on the external mechanism are insufficient.Aiming at the impact of product market competition,there are two contradictory viewpoints of "inducing effect"and "governance effect",so there is still a large space for deep and systematic research.This paper uses the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2018,constructs binary logit and MLogit models,and focuses on the mechanism and path of product market competition affecting information disclosure.The innovative works mainly include:(1)Reveals the internal mechanism of product market competition affecting internal control and information disclosure violation.Firstly,integrate the theories of fraud motivation and information "proprietary cost" to construct a comprehensive theoretical model of product market competition affecting information disclosure,and deconstruct its internal logical associations.Secondly,an incomplete information cournot model is constructed,and the "inducing effect" of product market competition is demonstrated by solving the mixed strategy equilibrium.Furthermore,the "moderating effect model" of internal control is proposed to achieve systematic analysis,which enriches and expands the theoretical perspective of information disclosure research.(2)Verifies the "inducing effect" of product market competition and the moderating effect of internal control.The regression results of the binary Logit model show that in the Chinese market environment,the more intense the product market competition is,the higher the probability of information disclosure violation is.Product market competition will "induce" the information disclosure violation,the internal control has a significant inhibitory effect.The conclusions are still robust after testing for rare event bias correction,measurement variable substitution,and propensity score matching.The conclusion provides empirical evidence for disclosure violation governance based on product market competition and internal control perspectives.(3)Further heterogeneity test results show that after distinguishing the types of enterprises,the "inducing" effect of product market competition on information disclosure violations mainly exists in enterprises with poor performance and weak market power,the moderating effect of internal control is not significant in the enterprises with poor performance,while it is significantly positive in the enterprises with weak market power.After distinguishing the types of information disclosure violations,the results of MLogit model show that the "inducing" effect is more significant for "failing to disclose information as required" and "major omission",and moderating effect of internal control is significant.This discovery provides directions for improving the "precision" and"targeting" of information disclosure violation prevention.(4)From the perspective of product market competition,this paper puts forward the ways to prevent violations of the "trinity" by the precise efforts of regulatory authorities,the strengthening of corporate principal responsibility and the active participation of investors.Regulators should focus on highly competitive industries,enterprises with poor performance,market power and internal control,improve disclosure rules,create a level playing field,and be a"guardian".Enterprises should implement the main responsibility,strengthen innovation-driven,improve core competitiveness,and turn the pressure of market competition into a driving force for improving internal governance.Investors should incorporate product market competition into decision and actively "vote by hands" and "vote by feet" to force enterprises to keep their bottom line.Multiple co-governance to promote enterprises to standardize the operation,legal disclosure,and created a clean and up-to-date information disclosure governance ecosystem.