Alleviating Related Party Transactions Through Corporate Social Responsibility

Usman M., ZALATA A. M., Gull A. A., Dong N.

International Journal of Finance and Economics, 2026 (SSCI, Scopus) identifier identifier

  • Publication Type: Article / Article
  • Publication Date: 2026
  • Doi Number: 10.1002/ijfe.70177
  • Journal Name: International Journal of Finance and Economics
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, ABI/INFORM, EconLit, Geobase, vLex
  • Keywords: China, corporate social responsibility, related party transactions
  • Azerbaijan State University of Economics (UNEC) Affiliated: Yes

Abstract

Using a sample of Chinese firms from 2010 to 2021, we examine whether corporate social responsibility (CSR) influences firms' propensity to engage in related-party transactions (RPTs)—an intriguing yet underexplored relationship. We find robust evidence that CSR-oriented firms are less likely to permit RPTs. Our results further indicate that RPTs conducted by more CSR-oriented firms are viewed favourably by the market and are associated with higher subsequent market value. In contrast, RPTs among other firms correlate with reduced market value, suggesting that CSR-oriented firms only allow efficient RPTs to meet legitimate needs and align with strategic value-maximisation objectives. Additional analysis reveals that ownership structure and firm-level governance quality moderate the CSR-RPTs relationship. These findings remain robust to alternative RPT measures and are not driven by endogeneity concerns.