Research On The Efficiency Of Internal Capital Market And Its Influencing Factors

With the further development of market economy and stock system, To build a large joint enterprise with international competitiveness have become the internal requirement of scale economic development of enterprises in China.Internal capital market of enterprise so as to construct. Research of past usually attach to enterprise group. Actually, as long as the enterprise has different investment projects division, the internal capital market can be produced, not to have to be attached to the enterprise group. Therefore, this paper has a definite definition of the boundary of internal capital market: internal capital market of our enterprise is a capital allocation mechanism exists in independent companies of our enterprise groups or between various departments within the enterprise(not a separate legal entity). The internal capital market has many advantages, helping enterprises to optimize efficiency of resource allocation, strengthening supervision and incentives, reducing constraints of financing, reducing the cost of financing. Year of 2015 and this year, registration system has been on preparation, the implementation of the system will bring the expansion of internal capital market. However, with the further development of the internal capital market of our enterprise, its complex organizational structure and the relation of interest triggered many problems, at present, there are a lot of enterprises and enterprise groups with low efficiency for various reasons. Therefore, the internal capital market in China is effective or not. What factors affect the allocation efficiency. How does it impact on them. We major to study the problem in this paper.After reviewing the related literature, we formate the following research ideas: first of all, define the internal capital market this article refers to. Next, via the analysis of the specific process of internal capital allocation,we analyzes the behavior of China's enterprise internal capital market capital allocation of operating mechanism, organizational carrier, operating characteristics and existing problems, and thus leads to analysis the theory of many kinds of factors influencing the efficiency of internal capital allocation.Combined with the characteristics of capital market development of China, combing and improving the method to measure the efficiency of internal capital market, we formed two different measure models of the same principle.Using listed companies of Shanghai and Shenzhen in 2013-2014 as sample and improved model of sensitivity of cash flow to the efficiency of the internal capital market of our country enterprise to carry on the measure. The results show that the overall operation of the internal capital market in our country is effective, but with low efficiency; the efficiency of business enterprise of different nature exist significant differences. Immediately analysis from three horizontal factors of operating characteristics, corporate governance, three vertical angle of external capital market of the internal capital market, group and non group, state-owned and private, valid and invalid. The conclusion shows that corporate governance of constraint mechanism and incentive mechanism is still lacking in increasing the efficiency of internal capital market. Results of the regression highlights the negative effects between different size of the shareholders of China's internal capital market efficiency. Connected transaction showed positive effects on efficiency. Non fair related transactions showed negative impact on efficiency. The degree of diversification, internal capital market size and group management produce positive influence on the efficiency of internal capital market. Impact of external capital market on the efficiency of internal capital market are not outstanding. In the end, we put specific policy recommendations according to the research conclusion.