Sharif Digital Repository

Using the data of the Tehran Stock Exchange, we analyze the characteristics and explanatory factors of major intra-group and out-of-group transactions and test the tunneling hypothesis in intra-group transactions. We find that out-of-group transactions can be largely explained by changes in control or management, firm size, and the type of the firm. However, intra-group transaction properties mostly depend on the difference between the parent company's cash flow rights in the buyer and seller companies. Also, in the final analysis, we conclude that many intra-group transactions are made to change the structure of the business groups, especially when investment companies buy shares of listed...