Research On Efficiency Of Listed Companies' Internal Capital Markets

The capital market of China offers the listed companies a platform for raising funds, promoting capital accumulation and optimizing resources. But, as a result of asymmetric information and other reasons, the listed companies carry on financing by External Capital Market (ECM) have to undertake the high transaction cost, and faces the great investment risk. Under this background, the listed companies often spontaneously build the Internal Capital Market (ICM), ICM is the enterprise internal capital allocation mechanism, the listed companies carry on financing through ICM, both can save the information search cost, and have dodge the investment risk to some extent. In fact, ICM has generally existed in the listed companies of China. Therefore, it's extremely important to study the efficiency of the listed companies'ICM.First of all, the article describes the research background, and significance, as well as the research status of domestic and foreign. Secondly, the article analyses the basic theory of ICM, mainly on the existence of ICM, the causes, the concepts, the features, the operation mechanism, the relationships between ICM and ECM. Thirdly, the article analyses the efficiency of ICM, the ICM have a positive efficiency and negative efficiency, there is a conclusion that the ICM of the listed companies have a negative efficiency far outweigh a positive efficiency through analyses the legal system, control over the situation, the difference between the nature of equity, equity structure of a "majority shareholder controller", such as impacting ICM of the special characteristics of the listed companies. Fourthly, the article verify the conclusion of the third chapter, it is verified that the negative efficiency of the listed companies'ICM have a dominant position through the empirical research and case studies, which affects the value of the listed companies.Based on the empirical conclusion and relative analysis, the article makes some suggestions for policy consideration on how to improve the efficiency of the listed companies'ICM.