The Cost of Related Party Transactions and the Intensity of Related Party Transactions: Evidence From Creditor Rights Reform
利用印度2016年破产法改革作为自然实验，发现加强债权人权利提高了关联交易成本，显著减少了控股股东的关联交易，尤其是机会主义类型的交易。
ABSTRACT This study investigates whether an increase in the costs associated with related party transactions (RPTs) for controlling owners affects the volume of such transactions. We exploit the implementation of the Insolvency and Bankruptcy Code (IBC) in India in 2016 as a quasi‐natural experiment that likely raised the costs of engaging in RPTs by strengthening creditor rights. Using a difference‐in‐differences design, we find that the enhanced enforcement environment following the IBC led to a significant decline in RPT activity by controlling shareholders. This decline is primarily driven by a reduction in opportunistic RPTs. Furthermore, the average market reaction to the IBC implementation is more pronounced for firms with higher pre‐reform levels of opportunistic RPTs, consistent with investors valuing the curtailment of tunneling behavior.