Does product market competition influence annual report readability?

الدور المُعدل للمنافسة فى سوق المنتج على العلاقة بين القدرة الإدارية وقابلية التقارير المالية للقراءة(باللغة الانجليزية)

“…This result is consistent with the notion that competition pressure increases managerial incentives to manage earnings due to their career concerns (Shi et al, 2018). This negative effect is more pronounced for firms with a higher level of trade secrecy and R&D-intensive firms (Rahman et al, 2023).…”

“…In addition, one of the methods of reducing the transparency of the information environment to hide the firm's bad news is to present complex and less readable financial reports, resulting in increased crash risk and an increased cost of capital. Consequently, policymakers need to be cognizant of these consequences (Lim et al, 2018;Dalwai et al, 2021;Gosselin et al, 2021;Bashirimanesh & Arefmanesh, 2023;Rahman et al, 2023).…”

“…PMC has become increasingly intense due to globalization. According to agency theory, the literature broadens our understanding of the effect of competition on firms' information environment, and firm opacity and focuses on exploring the links between PMC and financial reporting quality (Majeed et al, 2018;Babar & Habib, 2021;Rahman et al, 2023).…”

“…Firm information opacity decreases (increases readability) when competition rises. Due to competition, disciplined managers reduce agency conflicts and increase economic and information efficiency through increased financial reporting accuracy (Wang & Chui, 2015;Rahman et al, 2023). Additionally, competitive industries are distinguished from monopolistic industries in that they enhance incentives by offering information on performance evaluation (Karuna, 2007).…”

“…Hence, Hesarzadeh & Rajabalizadeh (2019) and Dalwai et al (2021) confirm a significant positive association between readability and informational quality; thus, readability has been a priority for all stakeholders' interests. Consequently, in recent years, regulators and corporate stakeholders, especially financial analysts and consultants, have paid special attention to the readability of annual reports (Bashirimanesh & Arefmanesh, 2023;Rahman et al, 2023).…”