English, Article edition: Cash-based related party transactions in new economy firms Gerry Gallery; Natalie Gallery; Matthew Supranowicz

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/28248
Physical Description
  • article
Language
  • English

Edition details

Title
  • Cash-based related party transactions in new economy firms
Author
  • Gerry Gallery
  • Natalie Gallery
  • Matthew Supranowicz
Physical Description
  • article
Notes
  • Purpose – This paper aims to investigate associations between related party transactions (RPTs) and governance and performance factors of new economy firms. Design/​methodology/​approach – Previous research has examined the RPTs of large US firms. In contrast, the authors focus on smaller, newly listed Australian firms. Referred to as “commitments test entities” (CTE), these firms are distinguished by the unique Australian Securities Exchange listing requirements applying to them, and associated additional (quarterly cash flow) reporting requirements. Findings – While strong corporate governance characteristics may be expected to constrain the amounts of payments and loans to related parties, we find only weak evidence to support that proposition. The results show that financial condition dominates the decision to engage in RPTs and suggest that external monitoring (associated both with larger firm size and the quarterly reporting phase) are a more effective restraint on the magnitude of RPTs for these high-risk CTE firms. Research limitations/​implications – The findings are generally consistent with the “conflict of interest view” proposed by Gordon et al. suggesting RPTs do not serve shareholders' interests. Practical implications – The findings suggest that external monitoring may be a more effective control over RPTs than internal corporate governance mechanisms in this institutional context of small “cashbox” firms. Since RPTs may not be in the best interests of shareholders, extending mandatory RPT disclosures to all periodic cash flow reports warrants further consideration by regulators. Originality/​value – This study contributes to the limited research on the effects and implications of RPTs.
  • Australia, Cash flow, Corporate governance
  • RePEc:eme:arjpps:v:21:y:2008:i:2:p:147-166
Language
  • English
Contributed by
OAIster

Get this edition

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment