Using large reductions in import tariffs as an exogenous shock to the competitive environment, this paper examines how an increase in foreign competition affects the importance of corporate governance. Consistent with prior studies, weak governance is associated with lower firm value, lower operating performance, lower labor productivity, higher capital expenditures, higher non-production expenses, and higher wages in the absence of increased competition. However, the differences between weak and strong governance firms along each of these dimensions are reduced or eliminated after a tariff cut. The effects are concentrated among firms in previously noncompetitive industries, defined as having sales concentration above the median or import penetration below the median in the year before the tariff cut. These conclusions are supported through the use of multiple alternative measures of operating performance and corporate governance. Altogether, the evidence indicates that an increase in competition can mitigate agency costs and serve as a substitute for traditional corporate governance mechanisms.

中文翻译：

---

公司治理与产品市场竞争：来自进口关税下调的证据

本文将进口关税的大幅降低作为对竞争环境的外生冲击，研究了外国竞争的增加如何影响公司治理的重要性。与先前的研究一致，在没有竞争加剧的情况下，治理薄弱与较低的公司价值、较低的运营绩效、较低的劳动生产率、较高的资本支出、较高的非生产费用和较高的工资有关。然而，在关税削减后，弱治理公司和强治理公司在每个维度上的差异都会减少或消除。影响集中在以前没有竞争力的行业的公司中，定义为在关税削减前一年销售集中度高于中位数或进口渗透率低于中位数。这些结论是通过使用多种替代的经营业绩和公司治理措施来支持的。总而言之，证据表明竞争的增加可以降低代理成本并作为传统公司治理机制的替代品。