Research On The Impact Of Corporate Governance On Internal Capital Market Allocation Efficiency

The capital allocation efficiency is one of the important strategic elements which affect the competitiveness and corporate value of enterprise groups.Because of the differences in allocation scope,subject and mechanism,capital allocation market can be divided into internal and external capital market.Compared with the external capital market,the inherent advantages in transaction cost,efficiency in information acquisition and independence in capital allocation make ICM a key point to achieve the final objectives.ICM uses the institutional framework and power structure of corporate governance as its carrier,so the inherent issues of corporate governance in Information Asymmetry,Agency and Incomplete Contracts make it become the bottleneck factor to improve the capital allocation efficiency of ICM.This paper has an insight into corporate governance and analyzes the impact of corporate governance on ICM capital allocation efficiency.Based on the depth profile on connotation and framework of corporate governance,this paper builds the model on the impact of corporate governance on ICM allocation efficiency.Synthesizing the data from WIND,RESSET,CSMAR and CNINFO,this paper selects 178 enterprise groups and 527 listed companies from 2012 to 2014 as the sample data and uses descriptive statistics,independent samples T-test,correlation analysis,multiple regression analysis and robustness test for empirical analysis.The results show that:(1)Per capita executive shareholding,the proportion of independent directors,the board size,the size of the board of supervisors and ICM capital allocation efficiency are positive correlation,which is in accordance with the theoretical analysis.This indicates that sound corporate governance mechanism can improve the ICM capital allocation efficiency through the way of balance of powers,equity incentive and strengthening supervision.(2)Managerial Ownership and ICM capital allocation efficiency are negative correlation.The proportion of the largest shareholder and ICM capital allocation efficiency are positive correlation.The two results are the opposite of the theoretical analysis,which is due to the unique system of background in China.(3)Asset-liability ratio and ICM capital allocation efficiency are negative correlation,which is in accordance with the theoretical analysis.Based on the above findings,this paper provides several effective and feasible suggestions from the perspective of listed enterprises and market regulars to promote the capital allocation efficiency of ICM.From the perspective of listed enterprises:(1)Enterprise groups should optimize the ownership structure,strengthen supervision awareness and perfect the information disclosure system in terms of power allocation mechanism;(2)Enterprise groups should increase the proportion of equity incentive in the incentive mechanism,and implement performance measures linked to equity incentive in terms of performance measurement and incentive;(3)Enterprise groups should strengthen the independence of the independent directors,establish efficient board of directors and board of supervisors and practice external supervisor system.From the perspective of market regulars,they should reform the system of board of directors and supervisors in terms of supervision mechanism,and make some suggestions legal to achieve the final objectives.