Research On The Allocation Efficiency Of Poly Group Internal Capital Market On Diversification Strategy

China's capital market is still in a period of transition and is still imperfectly developed,unable to fully meet the financing needs of enterprises.In order to elimiate external market financing constraints,enterprise try to improve the capital allocation efficiency through the establishment of internal capital market,giving full play to the group advantage.Diversification of enterprise groups and internal capital markets are closely interdependent.Diversified businesses can disperse financial risks,reduce financing costs and adapt to the external market changes more quickly,thus further improving capital allocation efficiency.However,excessive diversification will lead to businesses scale too large,lower internal information transmission efficiency,resulting in the problems of corporate headquarters "cross-subsidy" and " socialism",which will aggravate agency problem and increase agency cost,thus reducing internal capital market allocation efficiency.Therefore,the degree of diversification is closely related to internal capital market allocation efficiency.This paper has adopted the method of combining normative research and empirical research.In normative research,this paper mainly sorts out and summarizes the existing literature and data,and systematically discusses the connotation,operation mode and internal capital market efficiency,diversification strategy implementation conditions and its effect on internal capital market allocation efficiency.In empirical research used the case analysis,in the case of China's large enterprise groups Poly Group,choose the four listed company of Poly Group,Poly Developments and Holding Group,Poly Property Group,Jiulian Development and Poly Culture Group as sample,on the basis of the five consecutive years financial data to calculation and analysis,and research the degree of diversification effect on internal capital market allocation efficiency.This paper is divided into five parts: The first part is preface.This part introduces the research background and significance,it also review the function,efficiency of the internal capital market and diversification and internal capital market efficiency.The second part is theoretical overview.This part combed and summarized the relevant theories,including the connotation of the internal capital market,the measurement method,the operation mode and relevant theories,as well as the impact of diversification on the internal capital market allocation efficiency.The third part is thecase introduction.This part briefly introduces the introduction and diversified development of Poly Group,as well as the construction and operation of its internal capital market.The fourth part is to measure Poly Group diversification degree and internal capital market allocation efficiency,analyzing the degree of diversification have effect on internal capital market allocation efficiency.The fifth part is the conclusion and suggestion,as well as the shortcomings and prospects of this research.Based on the analysis of Poly Group internal capital allocation efficiency,this paper draws the following conclusions: the degree of diversification will have a direct impact on internal capital market allocation efficiency.When businesses transformed from specialization to diversification,its internal capital market allocation efficiency usually increases with the degree of diversification.However,when the degree of diversification is too high,the increase of the degree of diversification will have negative impact on internal capital market allocation efficiency.Therefore,there is an inverted u-shaped relationship between the two.In order to give better play of internal capital market and improve the efficiency of capital allocation,businesses should keep moderate diversification,improve the disclosure of the segment report and improve the functions of internal capital operation.The contribution of this paper is mainly from the perspective of enterprise diversification,which is relatively less studied among the influencing factors of China's internal capital market allocation efficiency.By using the method of case analysis,this paper explores the influence of Poly Group diversification degree on the internal capital market allocation efficiency,and enriches the research system of China's internal capital market efficiency.At the same time,the conclusions and Suggestions of this paper can provide a reference for the enterprise groups that implement diversification strategy,which to how to moderate diversification and improve internal capital market operation.Of course,this paper also has some shortcomings: due to the limitations of data acquisition,the research is not complete enough,the accuracy of the selected measurement method has not been verified,etc.,which needs to be improved in further research.