The Impact Of Group Corporate Governance On Internal Capital Market Efficiency

The function of resource allocation to internal capital market (ICM) is a effective complement to the imperfect external capital market (ECM), which has a great significance to our economic development. Tracing Origins of the factors which affect and restrict the efficiency of ICM, scholars find many factors are related to corporate governance. Both international and domestic studies show that governance of group company is the latest trend of the development of corporate governance theory. At the same time, with the characteristics of diversification and frequent internal capital operation, cooperate groups are treated as the most appropriate object to research ICM efficiency. As a result, this article means to research the effective factors to ICM efficiency under the visual angle of group company governance.Within Group corporate governance, major shareholders' behavior and principal-agent problems are most effective aspects to ICM efficiency. Based on this starting point, the paper will make a thorough analysis on the way corporate group governance affecting ICM efficiency, and take Chinese corporate group in 2009 for empirical research. The research result shows: the nature of controlling shareholder affect ICM efficiency, private-owned group's ICM is lower than State-owned group's. At the same time, the controlling shareholder's separation degree is negative to the efficiency of ICM, while controlling shareholder's Ownership concentration and managerial ownership is positive to the efficiency of ICM.