Propping through related party transactions

Jian, Meng; Wong, T.J.

doi:10.1007/s11142-008-9081-4

Cited by 637 publications

(516 citation statements)

References 38 publications

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“…The results indicate that related-party transactions enjoy a more positive CSR effect on long-term M&A performance than those with non-related party transactions. Our findings are contradicted by some studies, which concluded CSR leads to a "Resource Hollowing" effect [9,[51][52][53][54]. However, our findings are consistent with studies which concluded CSR brings about an "Efficiency Enhancing" effect [11][12][13].…”

Section: Effects Of Related-party Transactions On Csr-performance Linsupporting

confidence: 50%

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Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Qiao

2018

Sustainability

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This study investigates the effects of geographical regions and related-party transactions on corporate social responsibility (CSR) and long-term mergers and acquisitions (M&A) performance linkage. We conduct a Heckman two-stage model analysis, using data from listed firms in the Shanghai and Shenzhen stock exchange markets in China. The results indicate that: (1) buyers' CSR performance has a significant and positive effect on long-term M&A performance. (2) Significant differences exist across geographical regions in the links between CSR and long-term M&A performance. In our study, the effects of CSR on long-term M&A performance were positive and significant in a sub-sample of firms located in the eastern region, but the effects were negative and insignificant in a sub-sample of firms located in regions other than in the east. (3) Related-party M&A transactions experience more positive and significant CSR long-term M&A performance linkage, compared to non-related party M&A transactions. Our findings might provide more robust evidence to CSR performance linkage, as we have examined the linkage in a special context of M&A activities, using a Heckman two-stage model to alleviate endogeneity bias. We also bring further insights into the effects of two contingent factors (geographical regions and related-party transactions) on the CSR-performance linkage. The findings of this article suggest that it is reasonable for firms to act socially responsibly when generating economic benefits. Policy makers should consider how to encourage firms to better fulfill CSR through improving the market environment and by enhancing their levels of supervision.

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Section: Effects Of Related-party Transactions On Csr-performance Linsupporting

confidence: 50%

“…Significant evidence exists to show that controlling shareholders are more likely to tunnel through related-party transactions than to prop up a firm [51][52][53]. With respect to M&A activities, there are also negative effects of related-party transactions.…”

Section: Csr Related-party Transactions and Long-term Manda Performancementioning

confidence: 99%

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Qiao

2018

Sustainability

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“…the ownership structure and corporate control. In particular, many studies focus on the relationship between ownership structure (Jian & Tak, 2010;Kun, 2005;Munir, 2010;Zengquan, Sun, & Wang, 2004), the role played by the stock market (Gordon et al, 2004;Lo, Wong, & Firth, 2010;Yeh, Shu, & Su, 2012) and the quality and relevance of RPTs in corporate life. Cernat (2004) argues that CG represents not only a crucial difference between varieties of capitalism but is also a major factor in determining their economic performance.…”

Section: Literature Review Of Rptsmentioning

confidence: 99%

Disclosure on Related Party Transactions: Evidence from Italian Listed Companies

Bava

Trana

2016

Accounting, Economics and Law: A Convivium

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Recent shortcomings in corporate affairs, related to the bursting of the New Economy Bubble and the global financial crisis, have forced regulators to strengthen current rules introducing new bans and requirements, aimed at guaranteeing the substantial and economic fairness of related party transactions (RPTs). In 2010 rules regarding RPTs were completely reshaped by the Italian Regulatory Body for the Italian Stock Exchange (CONSOB Regulation no. 17221). One of the most important amendments regarded the change in the criteria by which RPTs are mandatorily disclosed to investors. This change replaces a selection process based on a qualitative with a quantitative approach, in order to reduce the subjectivity of this particular evaluation. This study aims to analyze the effectiveness of the disclosure of RPTs after the introduction of the new rules. Our results show that although the new rules contribute to increasing the amount of information disclosed to investors through a higher number of documents reported by companies, their percentage in relation to the overall amount is worryingly low.

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“…Business groups can overcome institutional voids and market failures by relying on the group's internal capital market and talent pool, by building intangible assets such as strong group reputation and brand names, and by accumulating expertise and knowledge from different affiliates operating in various locations (Belenzon and Berkovitz, 2010;Chang and Hong, 2000;Gopalan et al, 2007;Jian and Wong, 2010;Keister, 1998Keister, , 2001Khanna and Palepu, 2000;Khanna and Rivkin, 2001;Mahmood and Mitchell, 2004). The literature points to the performance advantages that emerging market business groups enjoy compared with other firms (e.g., Mahmood et al, 2011;Manikandan and Ramachandran, 2014).…”

Section: Business Groups In Chinamentioning

confidence: 99%

Technology transfer within China and the role of location choices

Kafouros

Wang

2015

International Business Review

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We examine how emerging country business groups overcome various technological constraints and succeed in enhancing their performance. Our theoretical contribution lies in showing how the ability of a business unit to benefit from intra-group technology transfer depends on the idiosyncratic manner in which the group geographically configures its network of units. The findings reveal that the geographic dispersion and concentration of the units of a group alter both the ability and willingness of its business units to transfer technologies to (or receive technologies from) other units and subsequently result in different performance outcomes. The location of a business unit also determines whether or not a unit competes with other fellow units and, consequently, influences how much a unit benefits from the technologies held by the group.

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Propping through related party transactions

Cited by 637 publications

References 38 publications

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Corporate Social Responsibility and the Long-Term Performance of Mergers and Acquisitions: Do Regions and Related-Party Transactions Matter?

Disclosure on Related Party Transactions: Evidence from Italian Listed Companies

Technology transfer within China and the role of location choices

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