Abstract

This research aims to investigate the impact of related party transactions, executive compensation & ownership structure on firm performance and value. The research includes all registered firms in the KSE 100 index. The time frame of this study is 7 years (2016-2022). Through empirical findings, it is proved that the related party transactions, executive compensation & structure of ownership have a significant influence on the performance and value of the firm. The study finds a positive impact of financial RPTs and related party purchases on both the profitability and value of firms. Lastly, the study indicates that ownership of banks, financial institutions, and associated companies has a positive influence on performance as well as on the value of firms. The theoretical implications of this study are two-fold. Firstly, this study represents a unique perspective on a comprehensive analysis of sub-categories of related party transactions, which allows for specific identification of types of related party transactions that have an impact on either profitability or value. Secondly, the three-pronged approach is unique to this study- it allows an opportunity to determine which other factors within the environment affect value and profitability at the same time.

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