Research On The Influence Of Internal Capital Market On Enterprise Value

enterprises in the external capital market financing severely, it is the rational choice for enterprise to solve the funding problem that caused by the defects of external capital market through formatting internal capital market. Economic reform in China, the enterprise group as a senior organizational development forms an important strategic position. Our government from the 20th century began to promote the Enterprise Group of 80, making a large number of listed companies in China exist in the corporate group. The internal capital market development of enterprise groups as the inevitable product of our internal capital market characteristics and mode of operation and its impact on the enterprise value to its constantly improve and enhance the efficiency of internal capital allocation on the advantages of enterprise groups in China play of great significance.Widespread ownership of listed companies in China under the guidance level of agency problems between the double agent, and the current lack of strong and effective system of protection of the interests of minority shareholders and related governance mechanisms, with control over management decisions by the shareholders may use advantage of the expense of other shareholders. Shareholders have control over the internal capital market benefits through the transfer or transmission, making the optimization of internal capital markets play an internal capital allocation function fails and the expropriation of minority shareholders as a tool to reduce the enterprise value. This innovative definition of the internal capital transactions involving non-business major internal capital allocation of equity classes, asset sale and restructuring, capital lending classes and four types of related party transactions associated security class, through its characteristics as an internal capital market variables, using event study methodology and regression analysis method with the empirical analysis, taking into account the impact of market returns and accounting earnings, study its impact on corporate value.The results show that the operation of internal capital first three observation window in the short-term (10 days) and long-term (6 months) showed a significant negative cumulative excess returns, the market significantly negative effect; by regression analysis also found that internal capital significantly reduced the market value of the enterprise. Therefore, our allocation of capital within the capital market functions not play a role, but a group occupying the tools listed company, its overall market inefficiency, internal capital allocation so as to effectively compete with the invalid provision of indirect evidence.