Property Right Contract Of Intangible Assets And Related Party Transactions

As controlling shareholders'incentive to expropriate resources gets stronger, using the property right contracts of intangible assets to manipulate the related-party transactions becomes more and more popular. This paper collects 1181 A-share listed companies from 1999 to 2008 to explore the relationship between property right contracts and related-party transactions. And the scale of related-party transactions is the measure of tunneling.At the beginning, this paper analyzes some intangible asset-related cases of listed companies with special institutional background in China. In the empirical part, the paper sorts intangible assets into two groups, one is brands property rights and the other is land tenure. Taking the split-share reform into account, this paper sets a dummy variable of this reform as a control variable.There are two aspects of the property right contracts. One is the ownership, the other is the cost. Therefore, this paper investigates the relationship from two angles. The result of empirical tests shows that when controlling shareholders hold the intangible asset property rights, the scale of related party transactions is larger than the situation when listed companies hold the property rights. Meanwhile, when listed companies get or use property rights for free, the scale of related party transactions is also larger. As for the combination decision of the property right contracts, this paper proves that when the controlling shareholders hold the property rights and allow listed companies to use them for free, the incentive of tunneling is much stronger. But when listed companies hold the property rights and pay to get them, the incentive of tunneling is mitigated.