• Journal of Distribution Science
• /
• v.18 no.2
• /
• pp.99-108
• /
• 2020

Purpose: This paper investigated the relationship between market competition and firm valuation error. Furthermore, Additional analyses were made according to the quality of financial reports and the listed market. Through the process we confirm to the impact of competition on the capital market. The purpose of this study is to analyze the impact of competition on valuation errors. The preceding studies did not provide a consistent results of the effects of competing functions on the capital market. One view is that the competition could mitigate the information asymmetry, and the other is that monopolistic lessens the manager's involvement in financial reporting. This study is intended to expand the prior study by analyzing the impact of competition on the capital market and on the valuation of investors. Research design, data, and methodology: The analysis was conducted on 12,031 samples over 11 years from 2008 to 2018 using data from market in Korea. Here the valuation error was measured by the research methodology of Rhodes-Kropf, Robinson and Viswanathan (2005), and competition measured by Herfindahl-Hirschman Index multiplied by (-1), and Concentration Ratio by (-1). Results: We confirm that the positive relationship between competition and the valuation error. In addition, we also found that the positive relation between competition and valuation error was in cases of low discretionary accruals and the KOSDAQ market. This means that the net function of competition does not mitigate valuation errors. Conclusions. This study has the following contributions when compared to prior research. First, the relevance between the level of competition and the valuation of the entity was confirmed. The study by Haw, Hu and Lee (2015) suggested that monopolistic industry of analysts' forecast is more accurate due to lower the variability in earnings. This study magnified it to confirm that monopolistic lessen information uncertainty in valuation. Second, the study on valuation errors was expanded. While the study on the effect of valuation errors on the capital market is generally relatively active, it is different that competition degree has analyzed the effect on valuation errors amid the lack of research on the effect on valuation errors.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.6
• /
• pp.145-155
• /
• 2020

This study analyzes the degree of competition in the oil refinery market in Korea, which is considered an oligopoly market. The price of gasoline and diesel and the quantity of supply are used to identify the market competition. We also analyze whether the oil tax reduction policy has affected market competition. The competitiveness of the market was examined using monthly data from 2008 to 2019. Bresnahan-Lau method was employed to estimate the degree of competition in the oil refinery market, which is frequently used in the industrial studies. The analysis shows that the gasoline and diesel markets seem close to a perfect competitive market. Also, the tax cut has weakened market competition. In other words, the monopolistic power has increased in the market, so consumers have not benefit from the price cuts as much as tax cuts. Although the oil refinery market where four major companies are competing, the government's monitoring and price disclosure system help the market to be highly competitive as much as a perfect competition market. The tax cut, in the high oil price era, has a negative effect on the competition because of an information asymmetry about the price-setting process between suppliers and consumers.

• The Journal of Asian Finance, Economics and Business
• /
• v.8 no.11
• /
• pp.79-86
• /
• 2021

In recent years, firm performance has been a topic that attracts many researchers. It is extremely important to identify the factors that change firm performance. In the current trend of competition and integration, foreign ownership, product market competition is found to reduce agency costs and impact firm performance. The purpose of this research is to investigate the relationship between foreign ownership, product market competition, and firm performance. Our research using a quantile regression model, through panel data of 290 companies listed on the Vietnam stock exchange (include Ho Chi Minh and Hanoi stock exchanges) from 2017 to 2019 that was collected by Thomson - Reuters DataStream has shown that foreign ownership and product market competition have a positive impact on Tobin's Q but are not statistically significant with ROA. Critically, our quantile regression results suppose foreign ownership, product market competition have a significantly larger positive impact in high-performing firms relative to low-performing firms. The results help propose solutions to planners and managers to change foreign ownership and product market competition to increase business performance. Besides, through quantile regression analysis, managers need to pay attention to the impact on foreign ownership, product market competition; there will be a difference between high-performing firms relative to low-performing firms.

• Journal of Distribution Science
• /
• v.17 no.3
• /
• pp.97-105
• /
• 2019

Purpose - The purpose of this study is to investigate the effect of the government support project on traditional market and the interaction effect between the government support project and the competition intensity. Therefore, this study focuses on the competition intensity of individual stores in traditional markets, unlike the traditional research flow, which is beyond the competitive structure of traditional markets and large retailers. Research design, data, and methodology - This study is based on the data of 'Statistics of Traditional Market in 2017'. In this study, a multiple regression equation was constructed using the number of government support projects as an independent variable, competition intensity as an interaction, and sales per store, number of customers per store as a dependent variable for analysis. A multiple regression equation was constructed for the main effect analysis. To investigate the effect of the interaction, cohen(1980)'s regression equation and two-way ANOVA were used. Results - First, according to this study, the traditional market participated in the government support project showed that the sales and the number of visitors per store in the traditional market were higher than those in the non-participation market. Second, the impact of government support projects on sales per store(also number of visiting customers per store) can be different depending on the competition intensity. More specifically, if the market is politically supported by a market with a high level of competition, it may be more effective than the market with no support. Conclusions - Based on the results of the study, we suggested academic and practical implications and suggested that competition intensity of stores in the traditional market should be considered in the future. The implications of this study are as follows. First, the effects of the government's traditional market support project were analyzed empirically. Second, this study is different from the previous studies in that it examined the competitive strengths and the effects of individual stores in traditional markets, away from competition between traditional market and large retailers. Third, it provided practical implications for the operation of government support projects.

• Journal of Korea Technology Innovation Society
• /
• v.9 no.4
• /
• pp.796-811
• /
• 2006

This paper aims to develop methodology and indicators to review effective competition in Korean mobile telecommunication market. After examining strengths and weaknesses of other countries' experiences, we proposed several indicators for the assessment of competition. Developed from criteria such as transparency, regulation cost, policy objectives, proposed indicators comprise market structure, behaviour of sellers and consumers, and consumer benefits. These indicators are applied to the Korean mobile market. During the period 2001-2004, 'the competition assessment index' increased steadily, meaning the state of competition was aggravated during this period.

• KDI Journal of Economic Policy
• /
• v.29 no.1
• /
• pp.79-112
• /
• 2007

Opening domestic market to international trade may enhance not only actual competition but also potential competition from foreign competitors. It seems that the competition authority has focused mainly on the actual competition (measured by the current market share) and has paid less attention to the potential competition. In this regards, this paper investigated the relation between potential foreign competition and domestic market structure. Using dynamic panel regression model, we analyzed the dynamic response of import penetration to the changes of domestic market condition in Korea as a proxy for the degree of potential foreign competition. The empirical results suggests that potential foreign competition does exist in the Korean manufacturing sector and this tendency is more stronger when the market is more concentrated. Thus, in order to effectively implement competition policy, it is necessary to consider both actual and potential competition.

• Journal of Distribution Science
• /
• v.17 no.4
• /
• pp.33-39
• /
• 2019

Purpose - This paper examines whether product market competition in distribution and service industries is related to audit quality. This paper investigates, specifically, the relationship in distribution and service industries by using Herfindahl-Hirschman Index and audit quality measured by audit fee and audit hour. Research design, data, and methodology - Using 1,011 firm-year observations of listed companies from 2002 to 2016 in distribution and service industries, this study examines whether product market competition in distribution and service industries is related to audit quality. Results - This study finds that market competition in distribution and service industries is negatively related to audit quality and this negative relation is pronounced for the firms with high outside director groups. Further analysis suggests that the relationship between market competition and audit hours is no longer significant. Conclusions - This study extended the existing scope of the audit quality study by systematically analyzing the impact of industrial-level characteristics (i.e. market competition) in the distribution service industries on audit quality. This study, in other words, suggests the regulatory body consider the industrial-level characteristics of each industry in order to enhance audit quality.

• Environmental and Resource Economics Review
• /
• v.23 no.4
• /
• pp.553-581
• /
• 2014

This paper analyzes competition among service stations in the Korean gasoline market. We consider spatial differentiation as a source of product differentiation as well as the characteristics of the stations and vertical contracts between refiners and retailers as factors causing changes in equilibrium prices in the Korean gasoline retail market. The effect of the government's price disclosure policy on the retail market competition is also analyzed. Moran's I test indicates that the prices of neighboring gas stations are spatially correlated in the market. It is also found that gasoline prices for vertically integrated stations are much lower than those for independent stations. In addition, unbranded stations charge lower prices than branded stations but also induce branded stations to price more competitively. Meanwhile, the government's price disclosure policy did intensify price competition in the retail gasoline market. It is inferred that the price disclosure policy contributed to retailers gaining more bargain power in price negotiation with refiners, causing an eventual increase in retail prices.

• KDI Journal of Economic Policy
• /
• v.38 no.1
• /
• pp.53-70
• /
• 2016

This paper examines market concentration and its effect on competition in the Chinese commercial banking market. This study also investigates how changes in competition have affected the financial stability of Chinese commercial banks. To test the competitive conditions, we obtained the H statistic of the Panzar-Rosse model from a revenue function equation. The degree of financial stability is estimated by the Z-score formula. The Chinese banking industry has become an increasingly less concentrated market with an increased number of banks. Along with a decreased market concentration, competition in the Chinese banking industry has improved moderately. However, its market structure is still far from a competitive market. An individual bank's ability to earn higher markup or charge a higher net interest margin contributes to its financial soundness, although a higher degree of market concentration may have negative effect on the financial stability of the entire banking system.

• Journal of the Korea Safety Management & Science
• /
• v.11 no.4
• /
• pp.261-267
• /
• 2009

The purposes of this article is to analyse how market competition of credit card company affect price(interest rate) and survival length of card users. This paper uses individual account data from a large Korean credit card company during the periods from 2002 to 2006. The findings of our study are as follows. First, market competition of credit card company have a negative effect with interest rate of credit card. Second, market competition of credit card company have a affirmative effect with survival length. Finally, The effect of Increasing delinquency rate due to price increase is smaller than decreasing delinquency rate due to extending survival length.