Financial Statement Comparability, Earnings Persistence, and Product-market competition: Evidence from Chinese listed firms

Abstract

Earnings persistence is directly related to earnings quality, and it is one of the critical features that show the firm's financial standing. This paper examines the effect of product-market competition on the relationship between financial statement comparability and earnings Persistence. Samples of this study include all A-listed, nonfinancial firms for the period from 2002 to 2018 in china, and finally, 4500 firm-year is the statistical sample of this research. The results showed that accounting information could be compared to companies as a useful monitoring tool to control and limit cold earnings management. Therefore, it reduces profit fluctuations and ultimately leads to Earnings stability. So the first hypothesis is based on the financial statement comparability of Chinese listed firms is positively related to Earnings Persistence. Also, due to competition in the product market, the intensity of the above relationship for Chinese companies increases.