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The impact of related party transactions on the operational performance of listed companies in China


  • Yenpao Chen
  • Chien-Hsun Chen
  • Weiju Chen


This study uses a comprehensive sample of 763 Chinese listed companies to explore the relationship between the extent of related party transactions and operational performance. The empirical results show that when the listed company is controlled by a related party, the higher the level of related party transactions, the worse the operational performance of the listed company; this is particularly true in the case of related party transactions that involve sales, loans, guarantees and mortgages, or leases. There is thus a clear need to improve the regulation of related party transactions and the related disclosure requirements.

Suggested Citation

  • Yenpao Chen & Chien-Hsun Chen & Weiju Chen, 2009. "The impact of related party transactions on the operational performance of listed companies in China," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 12(4), pages 285-297.
  • Handle: RePEc:taf:jpolrf:v:12:y:2009:i:4:p:285-297
    DOI: 10.1080/17487870903314575

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    Cited by:

    1. Martina Vallesi, 2013. "A measure of the sustainable connection between highest remunerations’ and economic performance," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 2013(2), pages 145-159.
    2. repec:eee:corfin:v:44:y:2017:i:c:p:1-14 is not listed on IDEAS


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