Research On Information Disclosure Of Related-party Transaction Of Listed Companies In China

Most of China’s listed companies are integrated by the group company by divesting some "highquality assets", which makes the listed companies inherently dependon the parent company, so it isdifficult to avoid the related party transactions. Related party transaction itself is a neutral economicbehavior, but it is different from common market transaction. On the one hand, regulated related-partytransaction can decrease the entire firm’s internal transaction costs, optimize the allocation of resourcesand form the economies of scale, while enhancing the company’s operating efficiency and corecompetitiveness, and then achieve the maximum interests of the group. But on the other hand, the groupcompany is essentially an organization under the control of body enterprise, resulting in transactionswithout following the rule of fair trade between the both partieswhich shall be equal status in the realtransaction process. Therefore the unregulated related party transactions become the major means to seekillegitimate interests for large shareholders, which harms the interests of medium and small investors,and disrupts the order of the securities market. From the practical point of view, a complete ban onrelated party transactions is impossible. At present, improving the information disclosure system ofrelated party transactions is the most effective way to safeguard the interests of medium and smallinvestors. Only the listed companies disclose related party transactions accurately, entirely and timely,and eliminate the information asymmetries from the medium and small investors, could the wide mediumand small investors make relevant decisions according to the influence of related party transactions,which thereby maintain the order of the securities market. This paper,by summarizing the research situation at home and abroad, basing onearningsmanagement theory, transaction cost theory and information asymmetry theory, starting from thedefinition of related parties and related party transactions, studies the relevant issues of informationdisclosure of related party transactions. By combining the statistical method in status analysis, this paperanalyzes the information disclosure of related party transactions of listed companies of the stock marketsof Shanghai and Shenzhen in the past five years.It makesaqualitative and quantitative analysis from theoverall situation of related party transactions, related transaction types, related party relationships,associated pricing principles, industry distribution, disclosure forms and other aspects, exposes theproblems in information disclosure of related party transactions by combining related cases, andprofoundly analyses the causes of the problems.Finally the author puts forward countermeasures andsuggestions fromthe angles of building investor compensation relief system, promotingindustry-classified regulation, improving the investors’ professional qualities,andso on, to improve thesystem of information disclosure of related party transactions.