Internal Capital Market: Rent, Control And Governance

With the wave of innovation and diversification in the organizational structure of enterprise,internal capital market is also beginning to emergent and develop.Chandler, in his"visible hand", believed that enterprise which combines the production and distribution will have more advantage in the capital supply through enterprise internal. Later, Alchian and williamson developed Chandler's view.The internal capital market concept was brought up by them, Williamson thought that internal capital markets exist in conglomerates, and considered the internal capital market were more efficient than external capital market in the capital allocation, supervision and encouragement. With the in-depth study, scholars found that not only conglomerates,but also holding corporate and the part of unitary corporate were the carrier of the internal capital market. In addition to the advantage in the capital allocation, monitoring, performance incentives, They also found,because of departing not only ownership and the right to operate,but also in right of control and cash flowing,that the internal capital market will lead to agential problems,such as manager control,ultimate control, etc, so as to enhance the difficult of corporate governance. In any case, because the internal capital market may alleviate the constraints of external capital credit, decentralize risk of management, achieve the creation of organizational rent in enterprises,the internal capital market in Chinese Business Group have a great practical significance.The paper make a comprehensive exposition about internal capital market through seven sections.It mainly reviewed the internal capital market at home and abroad ,and explored its content and theoretical basis ,and organizational carrier in the first, second chapters;In the third,fourth and fifth chapters ,we mainly focused the relationship between the internal capital market and the organizational rent , and the impact of the internal capital market in enterprise control and corporate governance under the internal capital market . Based on the above study, we emphatically investigated the impact of internal capital market to Chinese Business Group in the sixth Chapter.Though the internal capital market make the problem of corporate governance to difficulty.We believed ,because of external capital market's fault in our country ,that internal capital market is very necessary and effective alternative and complementary in Chinese Business Group.So we advocated to implement the strategy of improvement,governance and development to internal capital market.