Research On ICM Of Business Group From Diversity Perspectives

In the middle of the last century,America sets off a merger,reorganization and diversification of the waves.Since then,America comes up with concept of Internal Capital Market,ICM,the competitive situation between the various branches of the enterprise group is called "internal capital market".But it is interesting that,since the 1980 s,the emergence of a diversified group disintegration in America and more and more scholars believe that excessive diversification can not bring value proposition of enterprise groups.But there are so many diversified enterprise groups in the market from the 21 st century,why they can do? The reason is that studying the factors which affect the efficiency of the internal capital market thereby maximizes the favorable factor,weakening the unfavorable factors.The prerequisite is that the factors must be moderately diversified.So,especially from the perspective of diversification,to explain how to develop diversification to more conducive to the operation of enterprise capital market within the enterprise,thereby enhancing the value of enterprise groups in my paper.In our country corporate which financing channels are narrow,the information asymmetry between enterprises and external capital markets is significant.Under such circumstances,the internal capital market established by the enterprise group through diversified operation alleviated the financing constraint of the enterprise to a certain extent and improved the efficiency of the enterprise's resource allocation.This paper summarized that these are the diversification,the concept of internal capital market and its efficiency,the internal capital market.It takes the internal capital market theory and diversification theory as the theoretical basis for the following study of the ICM of business group from diversity perspectives.Then,through the description of the station of our country's ICM,the reason of inefficiency in the internal capital market has been explained.And this paper introduces the background of the Shangshi group and the basis of the case selection.Through the internal capital market construction and operation mode analysis,the real capital within the group is elaborated on the capital market.After using the operating performance and cash flow sensitivity analysis method,the Group's internal capital market efficiency has been evaluated before and after the revision of diversification strategy.At last it is pointed out that the reason of the Change of ICM Efficiency from diversity perspectives.The research conclusion is as follows: Shangshi Group's capital markets is invalid because it is too bound by its diversity,unreasonable about resource allocation,to a certain extent limited diversification can improve the efficiency of internal capital markets.It can be concluded that the change in strategy of diversification affects the efficiency of internal capital market.Besides,the ICM in Chinese public company is efficiency,but the level is not high.Secondly,efficiency of ICM in diversified company is higher than specialization,which depends on the current level of diversification of our nation's enterprises.Thirdly,ICM's efficiency will grow when the degree of diversification increased.Finally,appropriate managerial incentives will have a positive effect on allocation of internal capital and value of firms.According to the above conclusions,it is suggested low level of diversified companies should develop diversification strategy continuously.Apart from this,it is necessary to take a series of effective measures about improving managerial incentives and external market supervision and strengthening corporate governance to increase ICM's efficiency.In the following,the main contributions of this paper are listed.Firstly,this paper analyzes the efficiency of the internal capital market of the enterprise group from the aspects of cash flow sensitivity method,operating performance evaluation method and the influencing factors of diversification,complementing and enriching the theoretical structure of the internal capital market to a certain extent.Secondly,the paper has the depth case study on group internal capital market efficiency.Analyzing the factors that affect the efficiency of the capital market within the group to improve the efficiency of the internal capital market has a great role.Thirdly,the paper analyzes the status of our country's internal capital market recommendations,including the improvement of the enterprise information disclosure system,of the external regulatory environment,of the establishment of the Group's internal financial intermediaries and so on.At the same time because of limited knowledge and due to the fact that the time is not sufficient,there are some shortcoming for improvement in the search process.Firstly,the author selects a single case study.It is not a multi-case study and the empirical research is not entirely representative of the result of efficiency of internal capital market in our country's enterprise group.Secondly,the case data,coming from 3 listed companies of Shangshi,measure the efficiency of the internal capital market,resulting in efficiency estimation.It is observed that the actual results have a deviation.