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Related party transactions, disclosure and ownership structure in Brazil
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João Antônio Salvador de Souza 
, Patrícia Maria Bortolon , Ricardo Pereira Câmara Leal
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This article investigates the association between RPTs, disclosure, ownership structure, and performance in Brazil and uses a hand-collected sample of 3,790 Brazilian RPT contracts obtained from corporate filings of a representative and randomly drawn sample of public companies from 2010 through 2012. Firms with greater conflicts of interest potential may employ less RPTs to signal that there will be no abuse. There is a negative and significant relationship between RPT values and accounting performance, but the same is not true for market value. The evidence in this article contrasts with that presented in national surveys by Matos and Galdi (2014) and Silveira, Prado, and Sasso (2009a), which may reflect different methodological choices. Companies and market participants may realize that some types of RPTs are beneficial and others harmful to minority shareholders and their short and long term impacts on performance are not the same. The evidence suggests that both the hypothesis of efficient economic transactions and of the conflict of interest may have merit depending on the type of RPT and the performance metrics.
Keywords: Related Party Transactions, Disclosure, Ownership Structure, Corporate Governance, Brazil
Authors’ individual contribution: Conceptualization – P.M. and R.L.; Methodology – P.M.; Investigation – J.S.; Formal Analysis – J.S. and P.M.; Writing – J.S., P.M., and R.L.; Supervision – P.M.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G32; G34
Received: 13.02.2020
Accepted: 30.03.2020
Published online: 03.04.2020
How to cite this paper: de Souza, J. A. S., Bortolon, P. M., & Leal, R. P. C. (2020). Related party transactions, disclosure and ownership structure in Brazil. Corporate Ownership & Control, 17(3), 134-145. https://doi.org/10.22495/cocv17i3art10
