Environmental Uncertainty,internal Capital Market And Enterprise Value

Environment uncertainty is resulted in fluctuations and the fluctiongs are in the performance of enterprises,operating risk,information asymmetry,to the external capital market,it transfers the adverse signal,and reduces the external capital market investors' high uncertainty of enterprises to provide financial support,it will increase high environmental uncertainty of enterprises financing difficulty and cost.However,when the degree of environmental uncertainty is high degree,the management of the enterprise need enough cash holdings to deal with business risk.Research shows that the internal capital market was created in order to overcome the friction of external capital market,the internal capital market can reduce transaction cost and provide financing support to the enterprise.Enterprise group with unified management of decentralized funds and companies within the Group Co-insurance effects and increased borrowing capacity,the internal capital market with sufficient funds to provide financial support to the members of the enterprise;therefore,when the enterprise environment uncertainty degree is higher,the internal capital market will be more active,it shows more capital inflows in internal capital market,and internal capital inflow is greater than the internal capital market to capital outflows,namely high environmental uncertainty has positive internal net inflow capital.Due to greater restrictions in the external financing of firms with high financing constraints,its business activities rely on internal funds;therefore,the environment is not deterministic and financial constraint interaction under the influence,the environment results in financing constraints in high environmental uncertainty,the finance needs internal capital market is intense,and shows significant internal capital market of capital inflows,the amount of internal capital inflow is greater than that in the internal capital market of capital outflows,it shows a positive internal net capital inflows.Under the special emerging and transiting economic environment in China,the external capital market is underdeveloped,and the listed companies,state-owned enterprises in China occupy the intrest of the most;What is more,most of the commercial bank in China are in the shares of state-owned enterprises or in the shares of state-owned holdings,due to the special relationship between the state-owned enterprises,the government and commercial banks,compared to some of the private enterprises,state-owned enterprises are more likely to obtain bank credit funds to support the relatively loose external capital market environment.In addition,state-owned enterprises that in the pursuit of economic interests also bear the more social burden.Therefore,when the state-owned enterprises face the high environmental uncertainty,they easily obtained funds support provided by the government.Therefore,compared to private enterprises,state-owned enterprises face higher environmental uncertainty,the desire of seeking financial from the internal capital market is relatively weak.The degree of environmental uncertainty reflects the level of business risk,high environmental uncertainty of enterprise operating risk is relatively high,in order to resist the risk to the internal capital market to seek more financial support,which will lead to more negative economic consequences: on one hand,high environmental uncertainty bring more cash flow and increase the agent cost of high environmental uncertainty management;on the other hand,the group's overall effective allocation of funds do not flow to the high environmental uncertainty enterprise funds;therefore,high environmental uncertainty of enterprise capital inflows will lead to lower value,and high environmental uncertainty of enterprises capital outflows are not detracted from the enterprise value.This paper is based on the analysis of the theory,and used empirical research methods to test the environment uncertainty,the internal capital market,financial constraints internal capital market,environmental uncertainty,the value of the internal capital market and enterprise relationship.In this paper,the related important concepts are defined as follows:Internal capital market,the listed companies between the following four categories associated enterprises transaction funds,guarantee or mortgage,equity trading and credit and debt trading for internal capital market: the listed company's parent company,subsidiary,and the listed company is controlled by the same parent and listed companies imposed a significant impact on the investment;Internal capital market capital inflows means the internal capital market in the capital flows to the listing Corporation;Capital outflow from the internal capital market,which indicates that the capital flows from the listing Corporation to other companies in the internal capital market;The net capital inflow of the internal capital market indicates that the capital inflows to the internal capital market of a listing Corporation in an accounting year-the capital outflow from the internal capital market;The active degree of internal capital market indicates that the capital inflow of the internal capital market of the listing Corporation in a certain accounting year +outflow of the capital market.The main conclusions of the empirical test are as follows:Firstly,the degree of environmental uncertainty is higher,the level of activity in the internal capital market is higher,internal capital market capital inflows are more,the internal capital market of net inflow is more.Compared with the state-owned enterprises,private enterprises of environmental uncertainty and internal capital market capital flow capital net inflow of positive correlation are stronger.Further studies showed that environmental uncertainty degree and active degree of uncertainty and the internal capital market significantly positive correlation,and in the low environmental uncertainty group,the degree of environmental uncertainty and the internal capital market are not significant correlation.The degree of environment uncertainty and the internal capital market capital inflows have significantly positive correlation,existing in high environmental uncertainty group and private enterprise group,low environmental uncertainty group and state-owned enterprise group does not have significant correlation.The positive correlation between the degree of environmental uncertainty and the internal capital market net inflow exists in high environmental uncertainty group and private enterprise group.And in the low environmental uncertainty group and state-owned enterprise group they do not have significant correlation.When environmental uncertainty is high,internal capital market capital outflows are more;further study found that,environment uncertainty degree and internal capital markets capital outflow have positive correlation,they exists in high environmental uncertainty group,group of private enterprises and state-owned enterprises group,and low environmental uncertainty group have no significant correlation.Second,the degree of environmental uncertainty is high,financing constraints are more,at the same time it shows a higher internal capital market degree and internal capital market capital flows in;The higher level of financing constraints do not show a net inflow of more high internal capital market capital,but in the high financing constraint group exist significant positive correlation;with respect to state-owned enterprises,private enterprises of the degree of environmental uncertainty is higher,and financing constraints,capital market inflows and net inflow have stronger positive correlation.Further study found that,the higher the degree of environmental uncertainty,the active degree of financing constraints and internal capital market is positive correlation in the group with low degree of financing constraints and high financing constraint group,but it more coefficients in the high financing constraint group;in private enterprises in the sample group,the higher the degree of environmental uncertainty,financing constraints and internal capital market activity was significantly positive correlation,but in the state-owned enterprises sample group had no significant correlation.In the high financing constraint group and private enterprise group,the higher degree of environmental uncertainty,in the high financing constraint group and private enterprise group,financing constraints and internal capital market capital inflows are significantly positive correlated,but in the sample of state-owned enterprises and low financing constraint group does not exist significant correlation.The higher degree of environmental uncertainty,in high environmental uncertainty group and private enterprises in the sample group,there was a significant positive correlation between financing constraints and internal capital market capital inflows,but in the group with low degree of financing constraints and state-owned enterprises sample group have no significant correlation.The higher the degree of environmental uncertainty,subject to financing constraints of firms exhibit more internal capital market capital outflow;further study found that,in the group with low degree of financing constraints and state-owned enterprises in the sample group,the higher the degree of environmental uncertainty,financing constraints and internal capital market funding the outflow significantly positive correlated,but in the high financing constraint group and private enterprises sample group have no significant correlation.Third,the degree of environmental uncertainty is higher,the internal capital market capital inflows significantly reduce corporate value,while the internal capital market capital outflows do not reduce the value of the enterprise.Further studies showed that,the degree of environmental uncertainty is higher,in the high set of deterministic and private enterprises sample group,internal capital market capital inflows had significant negative correlation,but in the low environmental uncertainty samples and state-owned enterprises sample group have no significant correlation.There is no significant correlation in the capital outflow of the internal capital market,the enterprise value in the low environmental uncertainty group,the high environmental uncertainty group,the private enterprise group and the state-owned enterprise group.The degree of environmental uncertainty is higher,the active degree of internal capital market and enterprise value had no significant relationship;further study found that,in low environmental uncertainty group and high environmental uncertainty group,internal capital market capital inflows had significant negative correlation with enterprise value,sample group of private enterprises and state-owned enterprises in the sample group,the internal capital market activity and enterprise value have no significant correlation.The innovation of this paper lies in the following aspects:First,this paper studies the internal capital market from the perspective of environmental uncertainty;environmental uncertainty leads to the problem of risk management,performance fluctuations and information asymmetry,which will directly affect financing cost and financing difficulty in listing corporation in the external capital market;internal capital market is the unified management of decentralized funds,it eases financing constraints and allocate resource,therefore,the enterprise environmental uncertainty is high,the internal capital market of enterprise environmental uncertainty and the possibility of providing financial support will be higher;the paper divids internal capital market into those parts:the dergree of internal capital market active,capital inflows,internal capital outflow of capital.The paper researches relationship between the four aspects of environmental uncertainty and internal capital market.Based on the above analysis,it is significant to study the internal capital market from the perspective of environmental uncertainty.Second,this paper combines environmental uncertainty and property rights,and this paper studies the relationship between environmental uncertainty and internal capital market.As a result this paper enriches the content of internal capital market research.Third,this paper combines the environmental uncertainty and financial constraints and studies the relation between environmental uncertainty and financial constraints.Fourth,this paper studied the impact of internal capital market on enterprise value in different environmental uncertainty and different internal capital market direction;This paper refines the relationship between internal capital market and enterprise value research,and makes up for gaps in research in the related literature.