IMPACTS OF RELATED PARTY TRANSACTIONS ON THE AFFLUENCE OF INDIAN CORPORATE FIRMS

Stance of the corporate firms on the abuse of the related party transactions may not always be detrimental to the economic prosperity of the respective firm. Through these transactions the revenue and profit earnings of the entities may be increased unconditionally. This study is an effort to scrutinize the beneficial impacts of the related party transactions on the revenues and profits of the corporate firms across twenty sectors of Indian economy. For the execution of this objective we have used the data of the earlier mentioned companies for consecutive seven years started from 2009-10, and we have employed the panel data regression method. The finding of this study reveals that transactions with associated party can affect an entity’s revenue earnings and net profit earnings significantly. Furthermore, transaction with key management personnel can also stimulate the net profits of the companies taken into account.