This study examines whether and how policy changes that aim to improve market efficiency, specifically the mandatory adoption of International Financial Reporting Standards (IFRS), influence the relation between product market competition and stock price informativeness. Using a sample of European firms, we find a negative association between product market competition and stock price informativeness as evidenced by larger (smaller) stock price changes surrounding earnings announcements for firms facing more (less) product market competition. These findings are consistent with prior studies examining the U.S. capital market. We further find that IFRS adoption alleviates the negative association. This positive effect is more pronounced among firms domiciled in countries with stronger legal enforcement and among smaller firms. Our results provide insights into the interrelation between product and capital markets in the European setting. More importantly, our results highlight the importance of policy changes, which aim to improve market efficiency, in influencing the relation between the two markets and document the benefit of IFRS adoption in mitigating the negative competition-informativeness relation.

中文翻译：

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产品市场竞争、股票价格信息和 IFRS 采用：来自欧洲的证据

本研究探讨旨在提高市场效率的政策变化，特别是强制采用国际财务报告准则 (IFRS)，是否以及如何影响产品市场竞争与股价信息量之间的关系。使用欧洲公司的样本，我们发现产品市场竞争和股票价格信息量之间存在负相关关系，这可以从面临更多（更少）产品市场竞争的公司的收益公告周围更大（更小）的股价变化证明。这些发现与之前对美国资本市场的研究一致。我们进一步发现采用 IFRS 减轻了负面关联。这种积极影响在法律执行力较强的国家的公司和较小的公司中更为明显。我们的结果提供了对欧洲环境中产品和资本市场之间相互关系的见解。更重要的是，我们的结果强调了旨在提高市场效率的政策变化在影响两个市场之间的关系方面的重要性，并记录了采用 IFRS 在减轻竞争-信息的负面关系方面的好处。