The impact of the Good and bad news on the relationship between disclosure about related party transactions and capital market reaction

Related Party Transactions are the information that users of financial statements are interested to know about that information. Hence, for better understanding and rational decision making by the users, to disclose information related to this type of transactions on the financial statements is necessary. Therefore, this study aims to investigate the effects of good and bad news on the relationship between related party transactions and capital markets reaction. According to the research done by Widari et al (2016), abnormal stock return is used as a measure of capital market reaction. In this regard, a sample of 92 listed companies of Tehran Stock Exchange were selected and studied in the period from 2009 to 2014. The results indicate that the related party transactions are positively associated with capital market reaction, but the good and bad news do not influence on the relationship disclosure of related party transactions and capital market reaction.