The Effects of Market Competition and International Orientation on Management Control Systems’ Use by Emerging Market Publicly Listed Companies

47 Pages Posted: 4 Aug 2009 Last revised: 12 Jan 2010

See all articles by Neale Gilbert O'Connor

Neale Gilbert O'Connor

Hong Kong Baptist University; National University of Singapore

Sandra C. Vera-Munoz

University of Notre Dame - Department of Accountancy

Francis Chan

Hong Kong Shue Yan University

Date Written: August 2, 2009

Abstract

We examine the effects of market competition and international orientation on management control systems’ use by emerging market Public Listed Companies (PLCs). Our inquiry focuses specifically on China because this country is the world’s largest annual source of exports from among emerging market countries. We examine management control systems whose widespread use by Chinese PLCs has been documented by prior accounting research: formal procedures, strategic planning, approval procedures, budget targets, participative budgeting and performance evaluation. We provide empirical evidence that the association between two specific types of market competition (foreign entrants’ competition and customers’ buying power) and management control systems’ use depends on whether the PLCs compete predominantly in the domestic or international market. We discuss implications of our findings and provide some directions for future research.

Keywords: management control systems, foreign entrants’ competition, customers’ buying power, international orientation

JEL Classification: D21, M40, M46, M47, M41

Suggested Citation

O'Connor, Neale Gilbert and Vera-Munoz, Sandra C. and Chan, Francis, The Effects of Market Competition and International Orientation on Management Control Systems’ Use by Emerging Market Publicly Listed Companies (August 2, 2009). AAA 2010 Management Accounting Section (MAS) Meeting Paper. Available at SSRN: https://ssrn.com/abstract=1443202 or http://dx.doi.org/10.2139/ssrn.1443202

Neale Gilbert O'Connor (Contact Author)

Hong Kong Baptist University ( email )

Kowloon Tong, Kowloon
Hong Kong
93045964 (Phone)

National University of Singapore ( email )

1 Business Link
Singapore, 117592
Singapore
65 6601 2993 (Phone)

Sandra C. Vera-Munoz

University of Notre Dame - Department of Accountancy ( email )

248 Mendoza College of Business
Notre Dame, IN 46556-5646
United States
574-631-9041 (Phone)
574-631-5255 (Fax)

Francis Chan

Hong Kong Shue Yan University ( email )

10 Wai Tsui Crescent
Braemar Hill Road
North Point
Hong Kong

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