This paper aims to investigate the joint effect of product market competition (PMC) and institutional environment on accrual quality.,The sample covers a large data set of 52,138 firm-year observations from 35 countries over the period of 2011-2015. Using the weighted least square regression, the study estimates PMC and institutional environment on accrual quality. The study measures PMC based on Herfindahl-Hirschman index, anti-director rights index (ADRI) based on the revised and updated La Porta et al.'s (1998) and accrual quality using the modified Dechow and Dichev (2002) model proposed by McNichols (2002). The study also uses a series of specification tests using alternative measures for each variable.,The study finds that highly intensified PMC relates to a lower quality of accruals. The results also show that accrual quality is better in countries with stronger institutional environment, specifically countries with higher ADRI, investor protection, judicial independence, protection of minority shareholders’ interests, protection of property rights, strength of the auditing and reporting standards, efficacy of corporate boards and corporate ethics. The findings suggest that institutional factors weaken the negative impact of PMC intensity on accrual quality, hence suggesting that institutional environment has a significant role to enhance accrual quality among firms in highly intensified industries.,The findings provide additional insights to policymakers and regulators on the importance of strong institutional and industry environment that can provide incentives and extra governance mechanisms besides the conventional firm-level corporate governance.,This study contributes in understanding the impact of intensity of PMC on accrual quality internationally and subsequently highlights the role of institutional environment as significant country-level governance in determining financial reporting quality, particularly accrual quality.

中文翻译：

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产品市场竞争的激烈程度，机构环境和应计质量

本文旨在调查产品市场竞争（PMC）和制度环境对应计质量的共同影响。该样本涵盖来自35个国家的2011-2015年52,138个企业年观测值的大型数据集。使用加权最小二乘回归，研究估计了应计质量的PMC和机构环境。这项研究基于Herfindahl-Hirschman指数，基于修订和更新的La Porta等人（1998）的反导演权利指数（ADRI）以及使用由美国食品和药物管理局提出的改进的Dechow and Dichev（2002）模型的应计质量来衡量PMC。 McNichols（2002）。该研究还使用了一系列规范测试，对每个变量使用了替代度量。研究发现，高度强化的PMC与应计质量较低有关。结果还显示，在制度环境更强的国家，特别是ADRI较高的国家，投资者保护，司法独立，保护少数股东权益，财产权，审计和报告标准的实力，会计准则效力的国家，应计质量较好。公司董事会和公司道德。研究结果表明，制度因素削弱了PMC强度对应计质量的负面影响，因此表明制度环境对于提高高度集约化行业的公司的应计质量具有重要作用。