EFFECT OF RELATED PARTY TRANSACTION ON FIRM VALUE OF LISTED CONSUMER GOODS IN NIGERIA

Abstract

Related party transactions (RPTs) are of significant interest and concern to various
stakeholders in the global economy. This study examines the impact of related party
transactions on the firm value of listed consumer goods companies in Nigeria over an eight
year period (2015–2023). The study employed a longitudinal research design and purposive
sampling technique to achieve its objective.As of December 31, 2023, there were twenty-one
(21) listed consumer goods firms in Nigeria, out of which a sample of fourteen (14) was
selected. Data were obtained from annual reports and accounts, and panel data regression
analysis was used for data analysis.The findings reveal that RPTs have a positive and
significant influence on firm value. Similarly, leverage shows a positive and significant
relationship with firm value. However, firm size exhibits a negative and significant effect on
firm value. The study recommends that firms and regulators ensure transparency and
efficient management of related party transactions to mitigate potential risks while
optimizing their positive contributions to firm value.