In this paper, we examine the effects of market competition on corporate performance. In the first stage, we use Herfindahl-Hirschman Index to measure the degree of competition and markets are divided into three categories, namely competition, moderate competition and oligopoly. Fama-French is used to examine whether there is abnormal return existing in competition market. Then we use the index constructed by Chen, Kao, Tsao and Wu (2007) to decide the performance of internal governance and use it with competition degree to conduct the regression. This paper finds the following results, 1. the moderate competition market is reducing; 2. the portfolio of firms in competition markets outperforms that in oligopoly; 3. market competition has positive effect on ROA, ROE, EPS and Tobin¡¦s Q; 4. market competition and corporate governance are complementary.