Related party transaction is a very significant characteristic for the operations of business groups. A large number of literatures have discussed the effect for business groups by related party transactions but often concluded inconsistently. This paper further refines the research about the effect of credit risk of business groups by related party transaction based on the data of Chinese listed business groups with classical econometric model. Also, it also attempted to find the reasons behind that led the inconsistent result in previous studies. The results of this paper may provide a new perspective to consider the effect for credit risk of business groups by related party transactions and may also have some revelations for the further research.

related party transactions, business groups, credit risk.