The Split Share Structure Reform Of Related Party Transactions

In this paper, we test the market responses (CARs) to the announcements of 698 related party transactions occurred around the share reform period from 2005 to 2007. We find evidence that 1) The share reform has positive impact on market reactions to related party transactions. CAR of [-10, +10] event window rises from -2.8% pre-reform to 3.2% post-reform. 2) The share reform has also greatly weakened the association between CARs and company share structure.