Related Party Transactions and Financial Performance

• Main Authors: Yang,Chieh-Han, 楊傑涵
• Other Authors: Chen,Ching-Lung
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/68680802435850057655

碩士 === 國立雲林科技大學 === 會計系 === 104 === Related party transactions (hereafter RPTs) are prevalent among affiliated firms in Asian countries. There are two competing views to describe the motives of RPTs: (1) a part of efficient contracting with affiliated parties to be in benefits of stakeholders, to allocate resources and manage risk; (2) the way managers for personal purposes to get excess returns or inappropriate wealth transfers. However, managers use RPTs as effectively contracting or expropriate outside shareholders via self-dealing is an empirical issue. This study conjectures that different types of RPTs will reveal managerial motivation, which in turn, results in distinctive financial performance. Thus, this study uses both the sales-oriented and non-operating-oriented types of RPTs to examine the association between RPTs and subsequently financial performance. The empirical results are described as follows: 1. Sales-oriented RPTs are positively associated with a firm’s future financial performance and support the effectively contracting hypothesis. 2. non-operating-oriented RPTs are negatively associated with a firm’s future financial performance and support the opportunistic hypothesis that managers use RPTs to manipulate earnings reporting. 3. Collectively, the empirical results show different types of RPTs had different effects on a firm's future financial performance.