Effects of Internal Governance Factors on Cross-Border-Related Party Transactions of Chinese Companies

Song-Hua Hu, Guang Li, Yue-Hua Xu and Xu-Ang Fan

Emerging Markets Finance and Trade, 2012, vol. 48, issue 0, 58-73

Abstract: This study investigates the determinants of the cross-border-related party (CBRP) transactions of Chinese firms. Our empirical analysis of companies listed on China's stock exchanges provides insightful findings. First, the size of CBRP transactions is positively associated with concentrated ownership, CEO (chief executive officer) duality, and an imbalance of power among large shareholders. Furthermore, the size of CBRP transactions tends to decrease as the proportion of outside directors rises, but it is likely to increase as the outside directors' compensations become larger. State-owned companies make more CBRP transactions than non-state-owned companies. Finally, the equity incentive for executives produces insignificant effects on CBRP transactions.

Keywords: CEO duality; connected party transactions; corporate governance; equity incentive; outside directors; ownership structure (search for similar items in EconPapers)
Date: 2012
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