| Summary: | 碩士 === 逢甲大學 === 會計與財稅所 === 91 === Doing business with related enterprises has become the popular form of business operation. To protect the interests of minor investors and creditors, a new “Related Enterprises” chapter was inserted into Taiwan’s Corporation Law in the May of 1997. This study is thus aimed to examine empirically the effects of this new regulation on the related-party transactions.
This study first examines the related-party transactions, the content of the “Related Enterprises” chapter, and the related literature. Empirical test with publicly listed firms is then conducted, which covers: 1. A comparison of the total amount of related-party transactions pre and post the insertion of the new chapter; 2. Analysis of the individual item of related-party transactions; 3. Analysis of the standard deviation of the individual item of related-party transactions; 4. Analysis of the ratio of firms with transactions in the individual item; 5. Analysis of the mean of the individual item of related-party transactions.
The main findings are:
1. The total amount of related-party transactions is significantly higher in the pre-insertion periods than in the post periods.
2. The maximal values of all items of related-party transactions tend to be rather large. The item of related-party endorsement and guarantee has the largest maximal value, whereas the item of related-party property transaction loss has the lowest maximal value.
3. Except for the two items of purchase from related parties and payable to the related parties, the standard deviations of all items of related-party transactions are significantly larger pre the insertion of the new chapter.
4. Among the various items of related-party transactions, purchase from related-party is the most prevalently observed item, followed by payable to related-party and related-party endorsement and guarantee. In addition, the ratio of firms with positive values in all items of related-party transactions, except for payable to related-party, increases significantly after the new chapter is inserted.
5. The means of most items of related-party transactions increase with time. Furthermore, the means of all items of related-party transactions, except for the item of payable to related-party, enhance after the new chapter is inserted.
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