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Product Market Competition and Accounting Conservatism: International evidence

Haw, I.M., Li, Y. and Zhang, F.F. (2012) Product Market Competition and Accounting Conservatism: International evidence. In: American Accounting Association (AAA) 2012 Annual Conference., 4-8 August 2012, Washington, DC

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This paper examines the role played by product market competition in shaping accounting conservatism in an international setting. Using a large dataset from 38 countries, we find that product market competition is positively associated with accounting conservatism and that the positive association is strengthened in countries with strong legal institutions. Our empirical findings suggest that product market competition and strong legal institutions jointly drive accounting conservatism. Our study highlights the importance of product market competition as an effective industry-level governance mechanism in determining the quality of accounting earnings.

Publication Type: Conference Paper
Publisher: American Accounting Association
Copyright: The Authors
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