Returnee directors and related party transactions
Returnee directors and related party transactions
In this study, we investigate whether returnee directors (Chinese nationals with foreign experience serving as directors) mitigate opportunistic related party transactions (RPTs), a relatively under-investigated area of research. Using a large dataset of Chinese listed firms, we find that firms with returnee directors are significantly less likely to engage in RPTs (especially abnormal RPTs); this is because returnee directors’ international experience and relative independence enable them to serve as effective monitors. This effect is more pronounced in non-state-owned firms and those with weak internal governance. Notably, we find that RPTs in firms with returnee directors are associated with improved firm performance. This suggests that returnee directors, while curbing opportunistic RPTs, may facilitate efficient RPTs that enhance firm value. Furthermore, our analysis reveals that independent returnee directors exert a more significant influence in constraining RPTs compared to executive returnee directors. Our findings remain consistent after a battery of robustness tests.
Siddique, Muhammad Abubakkar
875342ec-4938-42cc-8547-e593e8a82737
Wang, Fangjun
3889613d-86dd-4aea-b025-cd7fd41ff923
Zalata, Alaa Mansour
0fc2c56d-97ad-44ce-ab31-63ca335dcef6
Gyimah, Daniel
260cf797-7dda-4df4-ad01-3424d99197e4
Usman, Muhammad
a09e6ced-b5aa-464b-b87b-923ffdf36b7d
Siddique, Muhammad Abubakkar
875342ec-4938-42cc-8547-e593e8a82737
Wang, Fangjun
3889613d-86dd-4aea-b025-cd7fd41ff923
Zalata, Alaa Mansour
0fc2c56d-97ad-44ce-ab31-63ca335dcef6
Gyimah, Daniel
260cf797-7dda-4df4-ad01-3424d99197e4
Usman, Muhammad
a09e6ced-b5aa-464b-b87b-923ffdf36b7d
Siddique, Muhammad Abubakkar, Wang, Fangjun, Zalata, Alaa Mansour, Gyimah, Daniel and Usman, Muhammad
(2026)
Returnee directors and related party transactions.
International Journal of Finance & Economics.
(doi:10.1002/ijfe.70158).
Abstract
In this study, we investigate whether returnee directors (Chinese nationals with foreign experience serving as directors) mitigate opportunistic related party transactions (RPTs), a relatively under-investigated area of research. Using a large dataset of Chinese listed firms, we find that firms with returnee directors are significantly less likely to engage in RPTs (especially abnormal RPTs); this is because returnee directors’ international experience and relative independence enable them to serve as effective monitors. This effect is more pronounced in non-state-owned firms and those with weak internal governance. Notably, we find that RPTs in firms with returnee directors are associated with improved firm performance. This suggests that returnee directors, while curbing opportunistic RPTs, may facilitate efficient RPTs that enhance firm value. Furthermore, our analysis reveals that independent returnee directors exert a more significant influence in constraining RPTs compared to executive returnee directors. Our findings remain consistent after a battery of robustness tests.
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Main returnee-RPTs after english editing Without track Changes R1
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Accepted/In Press date: 9 January 2026
e-pub ahead of print date: 6 February 2026
Identifiers
Local EPrints ID: 509439
URI: http://eprints.soton.ac.uk/id/eprint/509439
ISSN: 1076-9307
PURE UUID: a21c6075-07d9-4da8-bcf3-e912e0282d03
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Date deposited: 23 Feb 2026 17:43
Last modified: 24 Feb 2026 02:50
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Contributors
Author:
Muhammad Abubakkar Siddique
Author:
Fangjun Wang
Author:
Daniel Gyimah
Author:
Muhammad Usman
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