The Study of the Relationship between Related-party Transactions and the Control-ownership Wedge of the Ultimate Controlling Shareholder

Following the separation of ownership from management and creating the information asymmetry between owners and managers, the importance of the related-party transactions and its full disclosure, fair and transparent of information has been increased. Considering the importance of the nature of the related-party transactions, this study aims to examine the relationship between control-ownership wedge of the controlling shareholder and related-party transactions. To achieve this objective, 75 listed companies at Tehran Stock Exchange were selected during the years from 2009 to 2014. Using the software Eviews 7, hypotheses were tested. The results show a significant negative relationship between the related party transactions and the right gap control and ownership of controlling shareholders. Therefore, this result provides empirical validation of theory of self-interest