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Product market competition and corporate governance disclosure: evidence from the UK

Product market competition and corporate governance disclosure: evidence from the UK
Product market competition and corporate governance disclosure: evidence from the UK
In this study we measure multiple dimensions of product market competition and examine their impacts on corporate governance disclosure, based on a sample of UK public firms over the period 2001 to 2009. We use factor analysis to explore the different dimensions of product market competition; and regression models to analyse the association between multiple dimensions of product market competition and corporate governance disclosure. We find that firms in less competitive industries have significantly more corporate governance disclosure. Furthermore, we detect a positive association between corporate governance disclosure and board independence, as well as audit committee independence. This suggests that firms with better corporate governance tend to disclose more information to external investors. Overall the findings support the view that managers use more corporate governance disclosure as a substitute for the external disciplinary force of product market competition.

73-94
Al-Najjar, Basil
3cd44863-4e20-4df5-bcf3-f920b0d97d65
Ding, Rong
ca23647f-00f4-42d4-a308-6570c8e370b5
Al-Najjar, Basil
3cd44863-4e20-4df5-bcf3-f920b0d97d65
Ding, Rong
ca23647f-00f4-42d4-a308-6570c8e370b5

Al-Najjar, Basil and Ding, Rong (2014) Product market competition and corporate governance disclosure: evidence from the UK. Economic Issues, 19 (1), 73-94.

Record type: Article

Abstract

In this study we measure multiple dimensions of product market competition and examine their impacts on corporate governance disclosure, based on a sample of UK public firms over the period 2001 to 2009. We use factor analysis to explore the different dimensions of product market competition; and regression models to analyse the association between multiple dimensions of product market competition and corporate governance disclosure. We find that firms in less competitive industries have significantly more corporate governance disclosure. Furthermore, we detect a positive association between corporate governance disclosure and board independence, as well as audit committee independence. This suggests that firms with better corporate governance tend to disclose more information to external investors. Overall the findings support the view that managers use more corporate governance disclosure as a substitute for the external disciplinary force of product market competition.

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Published date: March 2014
Organisations: Centre of Excellence in Decision, Analytics & Risk Research

Identifiers

Local EPrints ID: 364936
URI: https://eprints.soton.ac.uk/id/eprint/364936
PURE UUID: ce0eb7fa-f6ac-4df2-9494-8d765e880db1

Catalogue record

Date deposited: 19 May 2014 08:59
Last modified: 18 Jul 2017 02:26

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