Investigating the Marginal Impact of Product Market Competition on Performance by Changing at Different Levels of Earning Management in Companies Listed on the Tehran Stock Exchange

Document Type : Original Article

Authors

1 Associate Prof., Department of Management, University of Isfahan, Isfahan, Iran

2 M.A., Department of Management, University of Isfahan, Isfahan, Iran.

Abstract

The competitive environment makes it difficult for firms to achieve effective performance. To be able to prove themselves, managers try to make performance positive by earning management. Based on this, the aim of the current research is to investigate the marginal effect (which includes both simple and Interaction) of competition on performance at different levels of earning management. In this research, variables of performance (asset return rate, sales return rate and equity return rate), product market competition and profit management have been used as indicators research. A statistical sample of 94 companies listed on the Tehran Stock Exchange between 2013 and 2019 was used for this research. Regression with panel data was used to test research hypotheses. The findings of the research show that competition has a significant effect on the three performance measurement indicators and the impact varies depending on the level of earning management. In such a way that with the increase in earning management, the level of competition has an increasing effect on performance, and with its decrease, this effect decreases. The results showed that the degree of competition has a rising impact on performance as earning management increases and a decreasing impact as earning management decreases. Also, the higher the earning management of the business unit, the higher the competition, which will lead to better performance.

Keywords

References

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Financial Management Perspective
Volume 13, Issue 42
July 2023
Pages 117-144

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