Is related party transactions linked to accounting comparability? Evidence from emerging market

Figures & data

Table 1. Research sample classification based on industry

Industry classification	2015	2016	2017	2018	2019	Grand Total
Basic Materials	63	73	78	86	96	396
Consumer Cyclicals	67	69	70	74	70	350
Consumer Non-Cyclicals	36	35	36	39	41	187
Energy	30	31	32	33	32	158
Healthcare	14	14	14	15	16	73
Industrials	126	129	137	144	152	688
Technology	10	11	11	12	12	56
Utilities	18	21	21	21	22	103
Total	364	383	399	424	441	2011

Table 2. Definition of variables

Variable	Definition	Source
COMP4	The average AIC for each combination form of the four firms with the highest comparability to firm	De Franco et al. (2011)
COMPIND	The median AIC for each combination form for all firms in the same industry as firm
COMPACCT	The average AIC for each combination form for all firms in the same industry
RPT_SALES	The total amount of RPT price that is classified as RPT sales	Downs et al. (2015); Gavana et al. (2022); Lee et al. (2014)
RPT_PURCHASE	The total amount of RPT price that is classified as RPT purchases
RPT_TOTAL	The total amount of RPT prices for transactions such as sales, purchases, receivables, loans, etc.
SIZE	The natural logarithm of the firm’s total assets	Wan and Wong (2015); H. D. H. D. Wang et al. (2019)
LEV	Total long-term debt divided by total assets
REV_GROW	The change in sales throughout the year (%)
TANG	The natural logarithm of the firm’s tangible assets

Table 3. Descriptive statistic

Variable	Obs	Mean	Std. Dev.	Min	Max
COMP4	2,011	−0.008	0.019	−0.375	0.000
COMPIND	2,011	−0.025	0.029	−0.573	−0.004
COMPACCT	2,011	−3.012	3.712	−63.373	−0.099
RPT_SALES	2,011	0.128	0.331	0.000	4.211
RPT_PURCHASE	2,011	0.178	0.773	0.000	11.090
RPT_TOTAL	2,011	0.374	0.912	0.000	15.320
SIZE	2,011	27.219	1.495	23.441	32.209
LEV	1,972	0.231	0.189	0.000	0.798
REV_GROW	2,001	0.125	0.639	−0.949	9.421
TANG	2,011	0.253	0.217	0.000	0.970

Table 4. Correlation matrix

	comp4	compind	compacct	rpt_sales	rpt_purchase	rpt_total	size	lev	rev_grow	tang
COMP4	1.000
COMPIND	0.944	1.000
COMPACCT	0.715	0.839	1.000
RPT_SALES	−0.006	0.013	0.047	1.000
RPT_PURCHASE	0.030	0.035	0.066	0.136	1.000
RPT_TOTAL	0.023	0.035	0.081	0.468	0.902	1.000
SIZE	0.024	0.042	0.050	−0.053	−0.092	−0.106	1.000
LEV	−0.089	−0.097	−0.072	−0.018	−0.138	−0.138	0.392	1.000
REV_GROW	−0.014	−0.017	−0.012	0.010	−0.033	−0.019	0.021	−0.005	1.000
TANG	−0.005	0.029	0.109	−0.011	−0.049	−0.066	0.184	0.251	−0.032	1.000

Table 5. Regression results for RPT_total indicator

Variables	Model 1	Model 2	Model 3
	COMP4	COMPIND	COMPACCT
RPT_TOTAL	0.0001***	0.001***	0.518***
	[12.05]	[4.10]	[13.82]
SIZE	0.001***	0.001***	0.188***
	[6.68]	[10.50]	[11.44]
LEV	−0.012***	−0.017***	−2.867***
	[−8.67]	[−13.75]	[−22.14]
REV_GROW	0.001	−0.001	0.028
	[1.31]	[−1.39]	[0.38]
TANG	0.004***	0.006***	2.693***
	[7.79]	[7.30]	[24.99]
_cons	−0.027***	−0.048***	−8.123***
	[−8.31]	[−16.99]	[−18.67]
N	1044	1476	1476
GMM test	0.4237	0.216	0.5126
Adjusted R^2	0.01	0.013	0.038

*, **, *** denote the level of significance of 10%; 5%, and 1%, respectively

Table 6. Regression results for RPT sales and RPT purchases indicators

Variables	Model 4	Model 5	Model 6	Model 7	Model 8	Model 9
	COMP4	COMP4	COMPIND	COMPIND	COMPACCT	COMPACCT
RPT_SALES	0.001***	a	0.003***		0.821***
	[3.94]		[5.25]		[9.48]
RPT_PURCHASE		0.0001***		0.0001**		0.377***
		[3.62]		[2.09]		[10.17]
SIZE	0.001***	0.001***	0.001***	0.001***	0.173***	0.179***
	[6.53]	[7.73]	[10.17]	[9.84]	[10.81]	[10.94]
LEV	−0.012***	−0.013***	−0.017***	−0.017***	−3.127***	−3.020***
	[−9.09]	[−11.32]	[−13.92]	[−13.63]	[−23.64]	[−24.63]
REV_GROW	0.001	0.001	−0.001	−0.001	0.09	−0.009
	[1.33]	[1.58]	[−1.57]	[−1.32]	[1.16]	[−0.12]
TANG	0.004***	0.004***	0.007***	0.007***	2.564***	2.739***
	[7.74]	[7.33]	[7.58]	[7.90]	[24.36]	[26.54]
_CONS	−0.026***	−0.028***	−0.049***	−0.049***	−7.546***	−7.745***
	[−8.13]	[−9.41]	[−16.34]	[−15.68]	[−17.83]	[−17.84]
N	1044	1044	1476	1476	1476	1476
GMM TEST	0.3178	0.3519	0.2812	0.3078	0.8587	0.2337
Adjusted R^2	0.01	0.011	0.012	0.013	0.032	0.033

*, **, *** denote the level of significance of 10%; 5%, and 1%, respectively

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