Empirical Research on Listed Company Related-party Transactions Impact Earnings Quality
|Keywords||Listed company Related-party transactions Earnings response coefficient Empirical research|
Related-party transactions, as an economic activity in itself is a neutral sectors of the economy. Whether domestic or foreign, and the transactions are very common, but unfair related party transactions will destroy the interests of most investors and creditors seriously.According to the 2005 inspection results of Shenzhen Stocks Exchange Integral Research Institute ,which show that: during 2003-2005 about 60 % of the listed companies have related-party transactions. From January 2003 to June 2004, From January 2003 to June 2004, The Tuopu software company has taken funds transfer to its 13 holding subsidiaries without having essential transaction. Therefore, the transactions of listed companies, especially on the impact of earnings quality is of great realistic significance.Basing on prior researchers’ theories and empirical models, using specific data and rich cases from Chinese security markets, I provide a numbers of empirical findings on the cause and consequence of related-party transactions by listed Chinese companies. Finally, some preliminary policy suggestions to governments and managers are given.More specifically, this dissertation is arranged in five chapters. Each chapter’s content is as follows: The first is introduction part, which I explained research reason and its method, and I look back the innovation of some related literatures and dissertations. Chapter 3 provides us panorama of the listed companies’ related-party transactions in our country and introduces the institutional background of it. On the one hand, the related-party transaction is gradually regulatory norms ; on the other hand , the replacement of the related-party transaction proposes a higher demand to the regulators. Chapter 4 analyses deeply the related-party transactions affect on the earnings quality. The transaction will be divided into 29 specific categories, and we studied between 2003-2005 transactions in details from the point of view of the market. Through empirical testing we prove that China’s A-share listed companies in addition to association guarantees and collateral trading practices reducing earnings quality, and the remaining transactions improving earnings quality; In addition, the research discovers that the market is sensitive to the listed company which use related-party transactions to avoid "ST" or issue additional shares. In the end, I give a general summary about the above findings and put forward some preliminary policy recommendations. At last, I point out that there are limitations in this dissertation.