Author(s)

Lingjie Wang ¹

Affiliation(s)

¹ School of Economics, Guangxi University/China-ASEAN Institute of Financial Cooperation, Nanning, Guangxi, China

Corresponding Author

Lingjie Wang

ABSTRACT

Most of Chinese listed companies have controlling shareholders. As a result, the conflict between these controlling owners and the minority or non-controlling owners becomes more pronounced. Controlling shareholders can harm the interests of minority shareholders through various means, and related-party transactions are an important way for controlling shareholders to exploit listed company assets (Yu and Xia, 2004)[1]. This article uses data from listed companies in the Shanghai and Shenzhen stock exchanges to examine the influence and economic consequences of peer companies' related-party transactions from the perspective of peer effects. The empirical results show that related-party transactions by peer companies in the same industry significantly affect the related-party transaction decisions of listed companies. Moreover, this peer effect has a significant negative impact on a company's innovation input and output.

KEYWORDS

Peer effects; Related parties transactions; Spillover

CITE THIS PAPER

Lingjie Wang, Analysis of the Peer Effects in Trading with Connected Parties. Financial Engineering and Risk Management (2024) Vol. 7: 58-65. DOI: http://dx.doi.org/10.23977/ferm.2024.070208.

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