Does corporate governance affect related-party transactions? A study on Indonesian companies listed on the Indonesian Stock Exchange in 2011-2015 Online publication date: Sun, 23-Sep-2018
by Arie Pratama
International Journal of Economic Policy in Emerging Economies (IJEPEE), Vol. 11, No. 5, 2018
Abstract: This research's purpose was to investigate corporate governance variables and whether they affect related-party transactions (RPTs). We used seven proxies for corporate governance variables: ownership concentration, directors' compensation, size of the board of directors, number of independent commissioners, audit firm, size of the audit committee and debt ratio. We used age, size and profit as control variables. This research employed the explanatory quantitative method. The final sample consisted of 223 companies listed on the IDX. The research took five year's firm data (2011-2015), making a total of 1,115 observations. To test the hypotheses, we used multiples regression. The research showed that the corporate governance variables showed mixed results, in which not all of the proxies had a significant effect on RPTs. The research model can explain 49.32% of the variability in RPTs and was considered to be fit.
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