Does market competition foster related party transactions? Evidence from emerging market

Shashank Bansal and Harminder Singh

Pacific-Basin Finance Journal, 2023, vol. 77, issue C

Abstract: We examine the impact of market competition on related party transactions (RPTs). Using a sample of 12,794 firm-year observations from listed Indian firms, we find that market competition has a positive impact on the usage of RPTs, and this effect is greater in firms that have a low level of monitoring and profitability. We find that firms in a competitive environment engage in a greater amount of business RPTs in comparison to non-business RPTs. Business group firms in competitive industries use RPTs significantly more than standalone firms. We also find that in a competitive market, RPTs are positively related to firm value.

Keywords: Related party transactions; Market competition; Emerging markets (search for similar items in EconPapers)
JEL-codes: G10 G30 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:77:y:2023:i:c:s0927538x22002049

DOI: 10.1016/j.pacfin.2022.101909

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