Research On The Internal Capital Market Allocative Efficiency In Faction Enterprises

Economic resources must be required allocative efficiency. Capital as a kind of economic resources, capital efficient allocation is important in modern economic development. Internal capital market and the external capital market is the two important steps in the process of capital allocation, can realize efficient allocation of capital in the end, it depends on whether it in these two markets both can achieve efficient allocation. Since put forward the concept of internal capital market in the early1970’s, as the enterprise organization structure innovation and the rise of a wave of acquisition and reorganization, foreign scholars study of internal capital market allocation efficiency has gradually standardized and systematic, however, domestic scholars in this field of research is still in its infancy.As a special form of enterprise group, faction enterprises have been widely existed in our country capital market, such as "Hongyi Series"、"Fuxing Series""Wanxiang Series"、"Delong Series" and so on. Because the faction enterprise actual controller of each division or subsidiary of the staff has a high degree of governance power, therefore, compared to the general form of the enterprise group, capital in the faction enterprise’s internal capital market can achieve more simple, more rapid configuration, flow and transfer, if this kind of capital allocation is correct, then its internal capital markets function better than the general group; once the excessive power lead to the actual controller without principles for capital allocation, will cause the entire faction enterprise speed landslide. Therefore, the allocation efficiency of in-depth study of internal capital market of faction enterprises has important theoretical and practical significance for the transition period of Chinese economy.In this paper, the main body is divided into theoretical framework and case analysis two parts. Theory part, firstly from the two aspects of the existence and efficiency at home and abroad and reviews relevant literature on internal capital markets, the second is based on the contents of the literature review, in the Chinese special system background, define the meaning of a faction enterprise, the concept and function of internal capital market, analysis internal capital market operation process and factors of a faction enterprise internal capital market allocation efficiency, lay the theoretical foundation for the case analysis part. Case analysis part, this paper based on Delong and Fuxing’s building process, operation mechanism of internal capital markets and the economic consequences of a capital allocation and so on,has carried on the thorough analysis, and from the influence factors of internal capital market allocation efficiency which compared to the main point of view, discussed the corporate governance, diversity, internal factors of financial intermediation etc, which effect the capital allocation efficiency direction and level, and get some relevant conclusions and enlightenments of our country’s faction enterprises’internal capital market allocation efficiency.Study found:Delong Series, which exist an active internal capital market, but the actrual control person Tang wanxin did not according to the principle of efficiency to allocate capital, scheduling makes long-term unprincipled funds internal capital market allocation efficiency is extremely low, eventually because of can’t get rid of the shackles of cash flow, in a few short months apart of the whole system; Fuxing Series, a type, whether in the enterprise, or size of the organization and development model are the most qualified compared with Delong Series, internal capital market also is very frequent, but compared to Delong is concerned, its capital allocation efficiency is much higher, it also determines the Fuxing different ending.Compared with the existing related literature, the innovation of this paper lies in:Firstly, in reference to domestic and foreign the internal capital market theory, the influencing factors of the allocation efficiency of dichotomy of internal capital market in faction enterprise is divided into external factors and internal factors, and then according to document tracking and reasoning to identify the specific content, to provide supplementary as the theoretical research on internal capital market in China. Secondly, the case analysis part uses the comparative research method. Through the analysis of the capital market the two most comparable establishment, operation and allocation efficiency of internal capital market, fully reveals the present faction enterprises internal capital market issues, and internal factors as the breakthrough point, further analysis of the relationship between the efficiency of capital allocation in each factor and the internal capital market. Thirdly, literature at domestic and foreign for reference, and connecting with the concrete case analysis, proposes some conclusions and enlightenment to construct the effective internal capital market of faction enterprises.Due to the article, it mainly adopts case study method, it is hard to avoid lacking on the representative. In addition, because our country of incomplete information disclosure of listed companies and non-listed companies financial data is missing, unable to analysis the case through open channels to get all the information you need, therefore shortcomings on data collection. Plus the writer’s ability is limited, hope to improve in the later research.