Effects of Related Party Transactions on Firms’ Credit Ratings

Corporate credit rating facilitates investment decision by comparing their credit risk with each other, On the other hand, the rate of the company determines the cost of financing in capital market.This study investigates the effects of the disclosure of related party transactions on firms’ credit ratings. Therefore, in order to test the research hypothesis, a sample of 105 firms was selected from the firms listed in Tehran Stock Exchange during the period 2016 to 2020 . the hypotheses were tested using regression method on panel data. The results showed that the f Related Party Transactions Disclosure and Credit Ratings, there is a negative significant relationship And these transactions will reduce the credit rating of the company. It is therefore recommended that financial analysts and rating agents evaluate the effects of these transactions and incorporate them into their valuation and credit rating models.