A Study On Corporate Governance And Internal Capital Market Allocation Efficiency

Resource allocation efficiency is an eternal problem of academic research, capitalis a scarce resource of the modern economy, how to configuration it scientific andeffective is very important. In the large enterprise groups, enterprise control of a largenumber of companies through mergers and acquisitions, listing, restructuring andreorganization of administrative. Group headquarters list company internal controlgroup through the pyramid structure, and make use of its headquarters to posite capitalallocation to it’s member enterprises. There is a lot of internal economic exchangesbetween members of the group enterprises, thus formed a Internal capital Market.Internal capital markets can make the enterprises bigger and stronger, alleviate thefinancing advantages, reasonable allocate resources, but its also brought a lot ofproblems. A group of large enterprise groups were collapsed, as Delong department,Hongyi department and Gelinkeer department.Them whether the internal capital marketcan play the role of rational allocation of resources? What factors affect the allocationefficiency? This studied is based on the two problems.Scholars researched internal capital market from the role of build motivation,influencing factors and the relationship with external capital market. But how the mostbasic configuration efficiency has not agreed conclusion, corporate governance is theimportant factors that affect the internal capital market allocation efficiency, The studydeeply analyzes the corporate governance group from all parties in the influence ofinternal capital market allocation efficiency. A great innovation of this study is themeasure of the internal capital market allocation efficiency. On the basis of In referenceto domestic and foreign scholars on the internal capital market allocation efficiencymeasures, from a strategic perspective, The study create a internal capital marketallocation efficiency measure model based on future return on assets.Due to the branch of China’s listed company disclose the financial datainsufficiently, We can not measure directly the internal capital market allocationefficiency to the single listed company. The study make an empirical analysis of the fouryears of data based on the118family enterprise group404listed companies from2010to2013. The study found that, The Internal capital market allocation efficiency in ourcountry is effective at whole, but the efficient is not high. In this study, the internal capital market allocation efficiency are analyzed from the three aspects of boardgovernance, such as the corporate governance of the influence, the controllingshareholder’s behavior, and the principal-agent relations. The study make the regressionanalyses from six aspects, such as nature of holding shares, equity balance degree, thecontrolling shareholder control and cash flow right two rights separation degree, theexecutives shareholding, the board size and proportion of independent directors of theboard of directors. The study found that the internal capital market allocation efficiencyof State-owned enterprises group is higher than the private enterprise group. The higherof the equity balance degree is, the higher of the efficiency of internal capital marketallocation. The efficiency of internal capital market allocation is lower when the boardsize is larger. The efficiency of internal capital market allocation is lower when thecontrol and the greater the degree of separation of cash flow right. It doesn’t bring topromote the efficiency of internal capital market allocation althought the increase of theproportion of the independent directors in the board. The higher executives shareholding,the higher the efficiency of internal capital market allocation.