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This study examines a link between firms' product market power, industry concentration, the degree of earnings management and the role of governance in curbing earnings management.

The author uses different panel techniques of feasible generalized least squares (FGLS) and system generalized method of moments (GMM) to show robust study findings.

The study results reveal that firms lacking product market pricing power engage in earnings management, adding a new dimension to the existing literature. These findings mirror even at the industry level, where the authors document immense competitiveness led to earnings manipulation and stringent corporate governance mechanism has the potency to curb earnings management.

The paper has valuable insights and practical implications for policymakers and market participants. The results indicate robust institutional oversight mechanisms can deter earnings management in a concentrated market.

To the best of the authors’ knowledge, this is among the first paper from India, a growing emerging economy, to look at the various aspects of market characteristics, earnings management and the role of corporate governance.