Related party transactions and corporate governance: Impact on performance

Ayu Kirana Putrika Dewi, Eka Pria Anas

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

This study aims to analyze the impact of related party transactions and corporate governance on firm performance.This study classifies the related party transactions (RPTs) into three types of transactions: accounts receivable, income, and expenses. Multiple regression analysis is used with panel data. The samples in this study consist of firms listed on the Indonesian Stock Exchange during 2011-2014. Results show that accounts receivable and expenses related parties (RPs) are insignificant toward firm performance; however, the income generated from RPs positively affects firm performance. The corporate governance mechanism negatively affects firm performance.This study classifies the RPTs into three types: accounts receivable, incomes, and expenses. The accounts receivable used because the amount of the other receivable transactions is much less than the amount of accounts receivable transactions. Lastly, income and expenses are used instead of sales and purchases like the previous studies to analyze all income and expenditure between firms and their affiliated parties.

Original languageEnglish
Title of host publicationContemporary Issues on Business, Development and Islamic Economics in Indonesia
PublisherNova Science Publishers, Inc.
Pages321-333
Number of pages13
ISBN (Electronic)9781536168327
ISBN (Print)9781536162783
Publication statusPublished - 1 Jan 2019

Keywords

  • Corporate governance
  • Firm performance
  • Indonesia
  • Related party transactions
  • ROA

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