Related-party transactions and CEO foreign experience: Evidence from China

Liping Dong, Sadok El Ghoul, Omrane Guedhami, Konari Uchida and Yuyang Zhang

Journal of Behavioral and Experimental Finance, 2024, vol. 43, issue C

Abstract: Chinese CEOs with foreign experience tend to engage less in related-party transactions (RPTs). This result holds across various analyses, including firm-fixed effects model estimations, matching on firm and CEO characteristics, additional controls, and instrumental variable regressions. The effect of CEO foreign experience is pronounced for non-state-controlled and non–politically connected firms. The effect is weaker for firms with independent boards and foreign shareholders. Moreover, CEOs exposed to more developed institutional environments tend to reduce RPTs more. Collectively, our findings indicate that CEO foreign experience can enhance corporate governance in emerging markets.

Keywords: Managerial foreign experience; Related-party transactions; Institutional environments (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:43:y:2024:i:c:s2214635024000789

DOI: 10.1016/j.jbef.2024.100963

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