RELATED PARTY TRANSACTIONS CORPORATE GOVERNANCE AND FIRM PERFORMANCE AN EMPIRICAL ANALYSIS OF INDIAN FIRMS

Abstract

newline In this thesis, we study about the related party transactions (RPTs) in Indian context along with corporate governance mechanism of India. The corporate governance (CG hereafter) mechanism of India has changed evolutionary after the implementation of CL49 listing agreements. Moreover, Indian firms structure is different from other developed and developing countries. Indian companies can be classified into two groups such as BG and SA companies. Most of the largest listed companies are majority-owned or controlled by founding families which are known as BG companies. Hence, we empirically study the effect of RPTs on the performance of Indian companies for the period 2003-2016. We do this because the CG mechanism is different for India according to CL49, the Listing Agreements (such as pre-approval of related party transactions from A. Comm). Further, I also intend to investigate if Indian CG structure helps to restrict the management s opportunistic behavior of transferring the resources from the company through RPTs. Moreover, as Indian companies are different in ownership structure from companies in other economies (such as domination of affiliated firms), and the magnitude of RPTs also vary across such firms; this thesis intends to additionally examine the empirical relation between RPTs, firm performance (FP hereafter) and CG in business group (BG hereafter) firms vis-à-vis Stand-alone (SA hereafter) firms.