We examine three information channels through which product market interactions in an industry can affect firms' incentives to misreport financial information to investors. We find that lower product market sensitivity to individual firms' information and greater use of relative performance evaluation encourage the commission of financial fraud. Industry structures that give rise to less collection of information about individual firms decrease the probability of fraud detection and increase the probability of fraud commission. We also examine dynamic effects of fraud. Our results suggest that, in fragmented industries, fraud can amplify cyclical fluctuations in the real economy.

我们研究了三个信息渠道，通过这些渠道，一个行业的产品市场互动可以影响公司向投资者误报财务信息的动机。我们发现，较低的产品市场对个别公司信息的敏感性和更多地使用相对绩效评估会鼓励金融欺诈。行业结构导致对个别公司的信息收集较少，从而降低了欺诈检测的可能性并增加了欺诈佣金的可能性。我们还研究了欺诈的动态影响。我们的研究结果表明，在分散的行业中，欺诈可以放大实体经济的周期性波动。