Internal Capital Market Impact On Financing Constraints

The "External financial market" is not already a fresh glossary for developed countries, and there is a series of transformations and difficulties as its development process in China. However, in the external financial market, the cost would be increased owing to the fact such as exorbitant transaction cost, moral hazard, adverse selection, information asymmetry, etc. Enterprises usually face a series of problems in terms of financing constraints. In that situation, a lot of enterprises do not try to search for more reasonable and lower cost in financial resources in external capital market, and so that the rudiment about internal financial markets gradually appears. However that, external financing ability for enterprises would be impaired by a series of problems such as multiple proxy,the tunneling effect and so on,and financing constraints of enterprises are further deepened as well. Some different opinions still existed in the academic circles owing the fact that the emergence of internal capital markets to external capital market actually is regarded as a complementary role or aggravated enterprise financing constraints. Therefore the dissertation has great significance on studying the positive and negative effects that the internal financial markets make to the financing constraints, and how to establish and perfect the internal financial markets to solve the problems about financing constraints.The fundamental framework spread out as following:The first chapter, introduction, mainly introduces the research background and significance of the dissertation. The literature reviews are combed and presented.The second chapter, theoretical basis, mainly expounds financing constraints and internal financial market theory, theory basis of financing constraints influenced by internal financial market.The third chapter, the analysis of financing constraints influenced by internal capital market, will firstly proposed of internal capital markets "effective theory" and "invalid theory". Based on that, the concrete analysis on advantages and disadvantage of financing is presented.The fourth chapter, case analysis, introduces the case from China Oil & Foodstuffs Corporation, observes and studies the situation of development on internal capital market, then respectively analyzed the construction of internal capital market in COFCO and its positive and negative effects.Chapter 5,some suggestions about perfecting operating mechanism in the internal capital market of enterprise group, combination of case analysis as well as our country enterprise group’s internal capital market operating mechanism of the realistic problems existing from the macro and micro point of view, perfect domestic enterprise group proposed internal capital market operation mechanism suggestion to improve efficiency on internal capital market of the enterprise group, make of internal capital markets fully exert positive effects.The dissertation tries to fill in the empty of research in the field and make internal capital market theory system to be more perfect by analyzing the establishment of internal capital markets for financing constraints both the positive and negative effects of internal capital market and solutions for deepened financial constraint. The paper also puts forward reasonable suggestions to make internal capital markets better effect, finally remission enterprise financing constraints problem. However, due to restrictions on case related information and data collection, there are certain gaps and omissions and without strong support of quantitative analysis in some of problems.In addition, because of particularity in Chinese capital markets, the research on internal capital market of enterprise group is still in exploration and uncertain stage, making the selection of case still do not have completely representative, can rise to a certain reference and function. To a certain extent, the above shortage weakened dissertation persuasion and creativity, therefore need further research and improvement. In terms of this thesis deficiency, comment and guidance coming from research scholars and experts are welcomed...