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Related‐party transactions and corporate performance following the adoption of International Financial Reporting Standards in Taiwan

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  • Wei‐Kang Wang
  • Wen‐Min Lu
  • Qian Long Kweh
  • Wun‐Ya Siao

Abstract

We explore the association between related‐party transactions and the efficiency of Taiwanese electronics companies following the adoption of International Financial Reporting Standards (IFRS) for the period 2010–2018. Tests of differences in mean showed that the efficiency and related‐party transactions of the sample companies were significantly lower in the post‐IFRS era. Regression results indicated that related‐party transactions have significantly positive effects on efficiency; however, this positive association turned out to be smaller following the adoption of IFRS in Taiwan. Overall, this study suggests that changing accounting policy and rules can significantly affect related‐party transactions in companies, and ultimately corporate performance.

Suggested Citation

  • Wei‐Kang Wang & Wen‐Min Lu & Qian Long Kweh & Wun‐Ya Siao, 2020. "Related‐party transactions and corporate performance following the adoption of International Financial Reporting Standards in Taiwan," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 371-379, April.
    • Handle: RePEc:wly:mgtdec:v:41:y:2020:i:3:p:371-379
    DOI: 10.1002/mde.3106
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    1. Challoner A. Matero & Hsien-Li Lee, 2024. "Effect of International Financial Reporting Standards on Firm Performance and Components of Leverage," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(1), pages 1206-1216, January.
    2. Challoner A. Matero & Hsien-Li Lee, 2024. "Impact of Outside Blockholders on Related Party Transactions and Book-tax Conformity Link," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(7), pages 1053-1064, July.

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