Social ties and related party transactions

IF 3.3 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2023-09-20 DOI:10.1016/j.intaccaudtax.2023.100577

Guang-Zheng Chen

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引用次数: 0

Abstract

This study examines the effect of social ties between the chief executive officer (CEO)/chief financial officer (CFO) and independent board members on related party transactions (RPTs). The presence of CEO/CFO-board social ties can weaken board oversight and result in propping or tunneling activities. However, firms can benefit from a socially connected board’s advice. Using a sample of Chinese listed firms, the results show that CEO/CFO-board social ties are positively associated with abnormal RPTs. This positive association is more pronounced for state-owned enterprises (SOEs), especially locally owned SOEs. Further analyses indicate that firms with socially connected boards engage in RPTs that are detrimental to shareholders. Additionally, the primary results seem to be largely driven by CEOs’ connections. Chinese regulators impose strict regulations on RPTs, directing firms toward transparent transactions. The results of this study, however, indicate that regulatory frameworks should be revised to account for the influence of social ties to protect minority shareholders’ interests.

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社会关系和关联方交易

本研究考察了首席执行官/首席财务官与独立董事会成员之间的社会关系对关联方交易的影响。首席执行官/首席财务官董事会的社会关系可能会削弱董事会的监督，并导致支持或挖掘活动。然而，公司可以从与社会有联系的董事会的建议中受益。以中国上市公司为样本，研究结果表明，CEO/CFO董事会社会关系与RPT异常呈正相关。这种积极的关联在国有企业中更为明显，尤其是地方所有的国有企业。进一步的分析表明，拥有社会关系董事会的公司参与了对股东不利的RPT。此外，主要结果似乎在很大程度上是由首席执行官的关系推动的。中国监管机构对RPT实施了严格的监管，引导企业进行透明的交易。然而，这项研究的结果表明，应该修订监管框架，以考虑到社会关系的影响，从而保护少数股东的利益。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.