Product Market Competition, Control Structure And Firm Performance: An Empirical Analysis

Control structure is an important criterion measuring whether or not the corporate governance structure is sound. A good corporate governance needs of internal mechanisms and external mechanisms together. The interaction between product market competition and corporate governance has been researched in foreign countries, and in China is also gaining the attention of scholars. But there are not much research for the interaction between the product market competition and the company's control structure. Then, based on China's transition economy background, can product market competition find ways to reduce the three kinds of agency costs? Can product market competition improve the governance performance over control structure? How is financial performance of listed companies in different product market competitions impacted by control structure? How to arrange control structure in different competitive environment in order to maximize corporate performance?This paper is trying to answer these questions by using empirical analysis method, by taking use of data from China's stock market listed company, and studying how product market competition impacts on corporate governance performance from several aspects of control structure. First of all, Review and analyze the company's structural factors that affects the performance of corporate governance, amputate out four factors such as stock concentration, equity properties, the proportion of independent directors, and whether the chairman and CEO are the same person, while putting forward the initial research hypothesis ,and building analysis model. Secondly, 07-08 samples of all listed companies in Shanghai and Shenzhen will be divided into high product market competition industry and low product market competition industry. Then, using the size of listed companies and asset-liability ratio as control variables, respectively, analyses the high product market competition industry and low product market competition industry, while finding out how control structure influence corporate performance using linear regression analysis method. Finally, sum up the empirical conclusions of this paper, putting forward the corresponding countermeasures and suggestions according to empirical results, and pointing out the future research direction.The empirical results show that product market competition can help improve corporate performance, but the control structure did not significantly affect the performance of product market competition. That is the control structure does not affect product market competition which promote the corporate performance. Also found that under different product markets competition degrees, the control structure impact on corporate performance differently, and more closely control the better the company's performance.