Product Market Competition, Equity Structure and Corporate Performance

Both the equity structure and product market competition not only can influence firm performance, but also can interact each other. With a panel date of manufacturing firm listed on the Shanghai Exchang and Shenzhen Exchange over the years 2007-2010, we further study the interaction between competition and equity strucure. The empirical study shows: there is a positive and significant correlation between competition and corporate performance, so are the degree of concentration of ownership, proportion of tradable shares and ownership balancing degree. Competition is complementary to moderate concentrated ownership, proportion of tradable shares and ownership balancing degree, while is a substitution of concentrated ownership. These conclusions deepen our understanding about the impact of competition and equity on corporate performance.