Abstract: Few studies have focused on the factors affecting the tone of annual reports of listed companies. Based on the data of listed companies from 2007 to 2017, the findings of this empirical study show that if the degree of industrial competition is higher, the tone of the annual reports of listed companies will be less positive. Further analysis shows that if an enterprise has stronger industrial competitive position and higher degree of diversification, the negative impact of industrial competition on the tone of its annual report will be weaker. If the institutional shareholders and the management hold more shares, the negative impact of industrial competition on the tone of its annual report will be stronger. The results of the tests based on the mediating effects suggests that industry competition can reduce the degree of ramification of earnings forecast by the analyst and in turn improve the information environment of the company through restricting the management of the positive tone. The above results indicate that macro industrial factors will affect the textual information disclosure in the listed companies.

Key words: industrial competition, textual information disclosure, tone of annual reports, information environment