Gauging the Impact of Related Party Transactions in Europe

Project Start:11/2020
Researchers:Andreas Engert, Tobias Tröger
Category: Law and Finance
Funded by:SAFE

Related party transactions (RPT) are an important topic in international corporate governance research and policy making. Tunneling transactions of major shareholders with the firm are a way to extract private benefits of control from the firm not only to the detriment of minority shareholders (redistribution) but also to society at large (welfare losses). Many institutions of corporate law and governance seek to address the negative impact of RPTs, but no conclusive evidence exists on which rules and standards actually work best. This project intends to gauge the impact of RPTs on firm value using hand-collected dataset on RPTs in selected jurisdictions. Quantitative data on RPTs for different parties is availalbe from 2005 onwards (IAS 24 requires amounts and types of RPT since 2004 amendment, in force since 2005)