Do related party transactions affect the relationship between political connections and firm value? Evidence from Egypt

Tariq Ismail (), Mohamed El-Deeb () and Yasser Tawfik Halim ()
Additional contact information
Mohamed El-Deeb: Modern Sciences and Arts University (MSA)
Yasser Tawfik Halim: Modern Sciences and Arts University (MSA)

Future Business Journal, 2022, vol. 8, issue 1, 1-12

Abstract: Abstract This paper aims to (i) investigate the impact of political connections (PC) and related party transactions (RPTs) on the firm value (FV), and (ii) test the moderating effect of RPTs on such relationship, while controlling for the firms’ corporate governance mechanisms. Based on 315 observations from publicly listed firms in Egypt, our results reveal that (i) there is a positive relationship between PC and the FV, (ii) there is a negative relationship between RPTs and the FV, and (iii) the existing of RPTs as a moderating variable enhances the impact of the politically connected companies on the FV. The findings suggest that the Egyptian firms are much affected by the politically connected board of directors or owners, and this significantly exists when associated with related party transactions, despite that, the corporate governance practices could mitigate such effects.

Keywords: Related party transactions; Political connections; Corporate governance; Firm value; EGX; Egypt (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1186/s43093-022-00123-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:futbus:v:8:y:2022:i:1:d:10.1186_s43093-022-00123-x

Ordering information: This journal article can be ordered from
https://fbj.springeropen.com/

DOI: 10.1186/s43093-022-00123-x

Access Statistics for this article

Future Business Journal is currently edited by Soad Kamel Rizk and Hayam Wahba

More articles in Future Business Journal from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().