Department Family Enterprise And Efficiency Of Internal Capital Market Research

On the one hand, the internal capital market(ICM) can ease the financing constraints and optimize the resource allocation. On the other hand, ICM can easily lead to excessive investment and the "empty" behavior. And ICM's effective and ineffective theory have been confirmed by different empirical researches. The influential factors of the ICM allocation are complex, and the differences in corporate governance structure have significant impact on ICM, So, it is necessary to have a systematic analysis of the ICM's general law based on the reality of the Business Group.First, the paper define the meaning of Business Group and then deeply analysis its characteristics, finding that the Business Group often implement the diversified business model. And ICM have an internal capital market and internal product market ,which have a complex equity control structure and multi-level agency problems.Second, from the point view of the function of the external and internal capital markets, this paper describes the organizational model of the internal capital market, and further examined the existence of the internal capital market of the Business Group by multiple linear regression method. The results show that: the investment level of the members in the group is not only significantly influenced by the cash flow of the themselves, but also influenced by other companies in the group. There is an active internal capital market in the Business Group.Through comparative analysis, this paper define the effectiveness of the internal capital market in the Business Group as the capital allocation behaviors which are benefit for the overall efficiency and value from the long-term perspective. And then , the paper systematically analysis the factors of the internal capital market and their results in the internal capital market.Finally, the paper takes advantage of the Q-sensitivity and the cash-sensitivity of investment methods to measure the market allocation efficiency of the internal capital market in business group. And then build corporate governance variables and asset concentration index. Through binary LOGISTIC model to make regression analysis, the results show that on the basis of the current ownership structure, the higher concentration of the stocks, the more governance of the board, the more ownership of stocks of the board and directors and supervisors in the listed companies, the more effectiveness of the internal capital market. The more capitals of the companies in the business group,the more concentration of the assets, and the lower efficient of the internal capital market in the business group.