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Effects of Internal Governance Factors on Cross-Border-Related Party Transactions of Chinese Companies

Author

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  • Song-Hua Hu
  • Guang Li
  • Yue-Hua Xu
  • Xu-Ang Fan

Abstract

This study investigates the determinants of the cross-border-related party (CBRP) transactions of Chinese firms. Our empirical analysis of companies listed on China's stock exchanges provides insightful findings. First, the size of CBRP transactions is positively associated with concentrated ownership, CEO (chief executive officer) duality, and an imbalance of power among large shareholders. Furthermore, the size of CBRP transactions tends to decrease as the proportion of outside directors rises, but it is likely to increase as the outside directors' compensations become larger. State-owned companies make more CBRP transactions than non-state-owned companies. Finally, the equity incentive for executives produces insignificant effects on CBRP transactions.

Suggested Citation

  • Song-Hua Hu & Guang Li & Yue-Hua Xu & Xu-Ang Fan, 2012. "Effects of Internal Governance Factors on Cross-Border-Related Party Transactions of Chinese Companies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(0), pages 58-73, January.
    • Handle: RePEc:mes:emfitr:v:48:y:2012:i:0:p:58-73
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    Citations

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    Cited by:

    1. Hong Nguyen Thi Phuong & Van Loi Tran, 2020. "The impact of related parties’ trading on the listed company’s earnings management - evidence in Vietnam," Management, Sciendo, vol. 24(2), pages 181-208, December.
    2. Andrikopoulos, Andreas & Merika, Anna & Merikas, Andreas & Sigalas, Christos, 2021. "Related party transactions and principal-principal conflicts in public companies: Evidence from the maritime shipping industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    3. Patrizia Gazzola & Stefano Amelio & Daniele Grechi & Fragkoulis Papagiannis, 2021. "NPO Funding in Italy: The Role and the Contribution of Corporate Governance," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(12), pages 1-1, July.
    4. Pier Luigi Marchini & Tatiana Mazza & Alice Medioli, 2018. "The impact of related party transactions on earnings management: some insights from the Italian context," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(4), pages 981-1014, December.
    5. Abdul Rasheed P C & T. Mallikarjunappa & K.T. Thomachan, 2019. "Promoter Ownership, Related Party Transactions and Firm Performance: A Study Among Selected Companies in India," FIIB Business Review, , vol. 8(3), pages 205-217, September.

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