This paper examines whether the type of competition in a market influences the association between the intensity of competition and demand for accounting information. Empirical analysis using a sample of 1,578 hospital‐year observations from hospitals in California finds no association between the intensity of competition and demand for accounting information in the presence of quality competition; however, when firms compete on price, the need to control costs leads to a positive association between the two. In addition, the change in the unit of analysis in the hospital industry from the payer to the ailment increased the demand for accounting information for all California hospitals. This study suggests that competition intensity increases the demand for accounting information under one type of competition (price), but not another (quality competition), and thereby contributes to our understanding of the reasons for the mixed evidence in prior literature on the relation between competition and the demand for accounting information.
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1 January 2005
Research Article|
January 01 2005
The Effect of Changes in Regulation and Competition on Firms' Demand for Accounting Information
Ranjani Krishnan
Ranjani Krishnan
Michigan State University.
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Online ISSN: 1558-7967
Print ISSN: 0001-4826
American Accounting Association
2005
The Accounting Review (2005) 80 (1): 269–287.
Citation
Ranjani Krishnan; The Effect of Changes in Regulation and Competition on Firms' Demand for Accounting Information. The Accounting Review 1 January 2005; 80 (1): 269–287. https://doi.org/10.2308/accr.2005.80.1.269
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