EFFECT OF RELATED PARTY TRANSACTIONS ON FIRM VALUE OF LISTED CONSUMER SERVICE COMPANIES IN NIGERIA
Omenka, Maria, Abdulkarim Alhassan S. and Abubakar, Halimatu Sa’adiya
Volume 11 Issue 1
Abstract
This study examined the effect of related party transactions on firm value of listed consumer service companies in Nigeria. The study used ex-post facto research design. The population of the study comprises all the twenty-four (24) listed consumer service companies on the floor of Nigerian Exchange Group (NGX) as at 31st December 2022 and sixteen (16) out of the twenty-four (24) companies were used as sample size using purposive sampling technique. The study used panel regression technique to analyse the data. The empirical evidence derived from the panel regression model indicates that related party transaction of sales has a negative and significant effect on firm value of listed consumer service companies in Nigeria within the period of the study (2013 – 2022). Similarly, the result also revealed that related party transaction of loans has a positive and significant effect on firm value of listed consumer service companies in Nigeria within the study period. Furthermore, the study found that related party transaction of receivables has a negative and insignificant effect on firm value of listed consumer service companies in Nigeria. The study concludes that related party transaction of sales, related party transaction of loans and related party transaction of receivables have combined effect on firm value of listed consumer services companies in Nigeria. The study, therefore, recommends that related parties should engage in proper monitoring of loans in order to reduce the high rate of non-performing loans. Keywords: Related Party Transactions, Firm Value
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