Keywords
Administrative monopoly regulation
Corporate misconduct
Internal controls
Submitted : 2025-08-27
Accepted : 2025-09-11
Published : 2025-09-26
Abstract
Maintaining fair competition is the core of guaranteeing the effective operation of the market economy. Using the Fair Competition Review System introduced in 2016 as a quasi-natural experiment, this study explores the impact of the system on corporate misconduct. The study finds that the Fair Competition Review System is negatively associated with corporate misconduct. This effect operates by increasing firms’ internal controls and mitigating the short-sightedness of the firms’ management. It is more pronounced at firms located in regions with poorer business environments and among firms with lower information transparency. Finally, the Fair Competition Review System effectively reduces business and bankruptcy risks. Overall, the study provides micro-level empirical evidence for the governance effects of the Fair Competition Review System and valuable references for corporate governance practices.
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