Impact From Internal Capital Market On Enterprise Financing

When a company controlled by the Group’s multiple business units, and there are different business units of these investment opportunities, then the headquarters of enterprise groups will always consider the maximization of the company as a whole, the company will make a decision to reallocate resources, reconfigure the internal funds of enterprises that form an internal capital market. At the present stage of such a special institutional context of Enterprise Group Internal Capital Markets relax financing constraints exist functions. Corporate Headquarters With the company’s reputation or popularity, from the external capital markets financing, and financial capital would certainly set its multiple subsidiaries aggregated from external financing even more, and then from the outside using the company’s headquarters to the capital market to raise funds effective internal re-configuration. Pyramid ownership structure as a result of the diversified business enterprise, pyramidal ownership structure for the company’s organization and capital markets have a great impact. Its financing for the company to bring the Gospel, but also bring some problems for the enterprise. Internal capital market has become the controlling shareholder of the company plundering the wealth of tools that damage the interests of minority shareholders, but also serious because think of enterprise development, reducing the value of the business which ultimately affects the healthy operation of the capital market.Based on this background, this paper first pyramid ownership structure, the definition of internal capital markets were defined, followed by an analysis of the internal capital market on the impact of financing constraints, which leads to the pyramid shareholding structure of internal capital market financing behavior problems; through the introduction of evidence, analysis of the2008to2012all pyramid ownership structure of the enterprise financing constraints influencing factors and derive cause internal capital market financing possibilities misconduct factors; Finally, to address these issues by improving the pyramid ownership structure internal capital market financing behavior inside and outside countermeasures.