Product market competition, ultimate controlling structure and related party transactions

Shenglan Chen, Kun Wang, Xiaoxue Li

Previous studies have shown that product market competition has an important effect on corporate strategies and internal governance mechanisms. Using a sample of China’s listed firms from 2004 to 2009, we explore the relationship between product market competition and normal related party transactions and find a significant positive relationship. In addition, we investigate the substitutive effect of product market competition and the cash flow rights owned by ultimate controlling shareholders on the extent of normal related party transactions. In particular, our results suggest a positive relationship between the ultimate controlling shareholders’ cash flow rights and normal related party transactions that is strongest in noncompetitive industries and weakens as product market competition increases.

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Year of publication:	December 2012
Authors:	Chen, Shenglan ; Wang, Kun ; Li, Xiaoxue
Published in:	China journal of accounting research : CJAR. - Guang dong sheng guang zhou shi : [Verlag nicht ermittelbar], ISSN 2214-1421, ZDB-ID 2548343-2. - Vol. 5.2012, 4, p. 293-306
Subject:	Product market competition \| Ownership structure \| Ultimate controlling shareholder \| Cash flow rights \| Related party transactions \| Eigentümerstruktur \| Corporate Governance \| Corporate governance \| Wettbewerb \| Competition \| Aktionäre \| Shareholders \| China

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Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.1016/j.cjar.2012.11.001 [DOI] hdl:10419/187579 [Handle]
Classification:	G32 - Financing Policy; Capital and Ownership Structure ; G34 - Mergers; Acquisitions; Restructuring; Corporate Governance ; L14 - Transactional Relationships; Contracts and Reputation; Networks
Source:	ECONIS - Online Catalogue of the ZBW

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