Product market competition and conditional conservatism

Product market competition and conditional conservatism Based on pooled cross-sectional analysis, we find a robust positive relation between product market competition and conditional accounting conservatism. We also find evidence of an inter-temporal increase in conditional conservatism following industry deregulation and increased antitrust case filings. Distinguishing further between two dimensions of competition, we find conditional conservatism is greater when there is a higher threat of new entrants as well as stiff existing competition. Moreover, we find these results largely hold for industry followers as opposed to industry leaders, suggesting that strategic considerations shape the extent to which product market competition affects conditional conservatism. Review of Accounting Studies Springer Journals

Product market competition and conditional conservatism

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Springer US
Copyright © 2014 by Springer Science+Business Media New York
Economics / Management Science; Accounting/Auditing; Finance/Investment/Banking; Public Finance & Economics
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