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Intra-Business Group Transactions for Inducing Relationships between Network and Performance: Can the Network Be Optimized?

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DOI: 10.4236/jmf.2013.33A002    3,222 Downloads   5,111 Views   Citations

ABSTRACT

This paper analyzes the relation between network linkage and firm performance through the intra-business group related-party transactions, and also explores whether the network linkage could be optimized. It is listed on the Taiwan Stock Exchange over 2006-2008 by using financial information for business groups. For whole samples, we find a U-shaped relation between ROA and related-party purchases network linkage, and there is an inverted-U-shaped association between related-party receivable-payable network linkages and debt ratio. We also find the sales expenses ratio is positively correlated with the number of related-party buyers, but negatively correlated with the related-party sales ratio. Moreover, for high related-party sales and high related-party purchases group, it demonstrates an inverted-U-shaped association between related-party sales and ROA, and the related-party receivable-payable gap ratio is negatively correlated with debt ratio. While for low related-party sales and low related-party purchases group, related-party purchases network linkage and ROA display a U-shaped characteristic, and there is a U-shaped association between total receivable-payable gap ratio and debt ratio.

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H. Kuo and L. Wang, "Intra-Business Group Transactions for Inducing Relationships between Network and Performance: Can the Network Be Optimized?," Journal of Mathematical Finance, Vol. 3 No. 3A, 2013, pp. 9-20. doi: 10.4236/jmf.2013.33A002.

Conflicts of Interest

The authors declare no conflicts of interest.

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