The Effect of Stock Price Crash Risk on Product Market Competition

The aim of this study is to investigate the effect of stock price crash risk on product market competition of listed companies of Tehran Stock Exchange. In this study, the information of 100 stock companies during the period of 2004-2014, based on the combined data were analyzed. Results of this study showed that there is a significantly negative relationship between stock price crash risk and product market competition. The existence of such a relationship can be explained by the information asymmetry and the lack of transparency in financial reporting. dissemination of negative information to market and the increased stock price crash risk cause that financial analysts revise their opinion about of company’ performance and evaluate negatively situation of company. In this way, the company will lose competitive advantage in the market.