Alleviating related party transactions through corporate social responsibility
Alleviating related party transactions through corporate social responsibility
Using a sample of Chinese firms from 2010 to 2021, we examine whether corporate social responsibility (CSR) influences firms’ propensity to engage in related-party transactions (RPTs)—an intriguing yet underexplored relationship. We find robust evidence that CSR-oriented firms are less likely to permit RPTs. Our results further indicate that RPTs conducted by more CSR-oriented firms are viewed favorably by the market and are associated with higher subsequent market value. In contrast, RPTs among other firms correlate with reduced market value, suggesting that CSR-oriented firms only allow efficient RPTs to meet legitimate needs and align with strategic value-maximization objectives. Additional analysis reveals that ownership structure and firm-level governance quality moderate the CSR-RPTs relationship. These findings remain robust to alternative RPT measures and are not driven by endogeneity concerns.
China, corporate social responsibility, related party transactions
Usman, Muhammad
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Zalata, Alaa
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Gull, Ammar
e6e2cb55-36d7-46b6-90f0-a0540f80e482
Dong, Nanyan
c5648628-c57d-4979-8c15-53bacf3fe630
Usman, Muhammad
a09e6ced-b5aa-464b-b87b-923ffdf36b7d
Zalata, Alaa
0fc2c56d-97ad-44ce-ab31-63ca335dcef6
Gull, Ammar
e6e2cb55-36d7-46b6-90f0-a0540f80e482
Dong, Nanyan
c5648628-c57d-4979-8c15-53bacf3fe630
Usman, Muhammad, Zalata, Alaa, Gull, Ammar and Dong, Nanyan
(2026)
Alleviating related party transactions through corporate social responsibility.
International Journal of Finance & Economics.
(doi:10.1002/ijfe.70177).
Abstract
Using a sample of Chinese firms from 2010 to 2021, we examine whether corporate social responsibility (CSR) influences firms’ propensity to engage in related-party transactions (RPTs)—an intriguing yet underexplored relationship. We find robust evidence that CSR-oriented firms are less likely to permit RPTs. Our results further indicate that RPTs conducted by more CSR-oriented firms are viewed favorably by the market and are associated with higher subsequent market value. In contrast, RPTs among other firms correlate with reduced market value, suggesting that CSR-oriented firms only allow efficient RPTs to meet legitimate needs and align with strategic value-maximization objectives. Additional analysis reveals that ownership structure and firm-level governance quality moderate the CSR-RPTs relationship. These findings remain robust to alternative RPT measures and are not driven by endogeneity concerns.
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Accepted/In Press date: 17 January 2026
e-pub ahead of print date: 10 March 2026
Keywords:
China, corporate social responsibility, related party transactions
Identifiers
Local EPrints ID: 510059
URI: http://eprints.soton.ac.uk/id/eprint/510059
ISSN: 1076-9307
PURE UUID: b3f479d9-61bf-4dcf-ac74-0bbed6641167
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Date deposited: 16 Mar 2026 17:54
Last modified: 21 Mar 2026 03:03
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Author:
Muhammad Usman
Author:
Ammar Gull
Author:
Nanyan Dong
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