The Impact Of Digital Economy On Related-party Transactions

In recent years,with the widespread popularity of the internet and the continuous development of emerging digital technologies such as big data and artificial intelligence,the digital economy has gradually become a hot spot of the times,which has brought dramatic changes and innovative development in the financial market,thus adding new vitality to the supervision and governance of related party transactions.Based on the related party transaction data of all non-financial listed companies in Chinese A-share market from 2011 to 2021,this paper empirically tests the effect of the development of the digital economy on alleviating the abnormal related party transaction of the enterprises by using the fixed effect model.The study found that the development of digital economy can significantly reduce the abnormal related party transactions.Specifically,the development of the digital economy has improved the internal control level of enterprises.Good internal control has contributed to the timely supervision,detection and prevention of illegal connected transactions,thus reducing the probability of abnormal related party transactions.On the other hand,the development of the digital economy has significantly improved the quality of information disclosure of enterprises and reduced the "information friction",thus effectively reducing the number and scale of abnormal related party transactions.Relying on massive data and emerging technologies,the digital economy plays a strong enough role in protection and governance in enterprise operation.In order to improve the accuracy of this study,this paper also analyzes the heterogeneity of the samples according to the degree of equity balance,the proportion of independent directors,the degree of difference between control rights and cash flow right and the degree of competition in the industry.The study found that the internal governance level of enterprises with low equity checks and balances,low proportion of independent directors,and high degree of separation of the control rights and cash flow rightis relatively worse,and the constraint on the ultimate controller is lower,so it is more likely to produce abnormal related party transactions and other violations.Therefore,the marginal effect of additional governance brought about by the development of the digital economy is even greater.In addition,when the industry in which the enterprise belongs is facing a lower level of competition,the enterprise’s decision-making will be more relaxed,and the motivation to prevent activities that harm the interests of the company will be significantly reduced,and even may encourage the irrational behavior of the enterprise.Therefore,in such cases,the digital economy also plays a greater role.This article has enhanced our understanding about abnormal related party transactions and provided evidence to support relevant government departments to use big data technology to govern related party transactions.It also has certain reference value for evaluating and predicting the economic consequences of the digital economy and promoting the digital economy research academically.