Discriminatory related party transactions: a new measure

Mohammad Tareq, Muhammad Nurul Houqe, Tony van Zijl, Dennis William Taylor and Clive Morley

International Journal of Accounting & Information Management, 2017, vol. 25, issue 4, 395-412

Abstract: Purpose - The purpose of this study is to develop a new measure for discriminatory related party transactions (DRPTs). There are currently measures for such discriminatory transactions but the new measure has a strong theoretical basis and is less susceptible to measurement error. Design/methodology/approach - This paper develops and tests a new measure for these discriminatory transactions. Type I and Type II error rates and the power of the new measure are compared with an existing measure using computer-simulated and real data. Findings - The capital market sensitivity of the new measure is also tested and compared with the existing measure. The new measure is found to be superior. Practical implications - The new measure of DRPTs has the potential to contribute to both further research on the impact of related party transactions and policy-making in relation to DRPTs. Originality/value - This paper has developed and tested a new measure for DRPTs.

Keywords: Related party transactions; Discriminatory related party transactions; Private benefits; Controlling shareholders; Bangladesh (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijaimp:ijaim-10-2016-0102

DOI: 10.1108/IJAIM-10-2016-0102

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