A Study For Internal Capital Market's Efficiency Of Chinese Enterprise Group

Now China pay more and more attention to develop large-scale enterprise groups, and will develop enterprise-group economic reform and development in China. To make enterprise groups efficiently develop, the enterprise group's internal resources configuration is very important. How to give full play to internal capital markets is of great significance especially in the global financial crisis background, such as the capital allocation function of the enterprise groups. This paper mainly put emphasis on the enterprise group's internal capital markets. The efficiency of the internal capital is the key point by studying Chinese enterprise groups. According to the results, there will be some suggestions about how to improve the efficiency of the internal capital market.This paper reviews the research history of internal capital market on the related literature, which is divided into four categories. It respectively is existence, efficiency, the relationship between internal capital market and external capital market and developing countries' internal capital markets. And the next is the introduction of relevant theory of internal capital market, including about enterprises organization theory and internal capital markets, the advantages and disadvantages of internal capital markets and the range of the internal capital markets etc. The key point of the paper is the empirical test to the internal capital markets of Chinese enterprise groups during 2006-2008 and the case research about WEICHAI POWER CO.LTD. Finally we conclude that the efficiency of internal capital market in Chinese enterprise-groups is low, even is invalid.In the end, according to the fact of the low efficiency, we give some suggestions about how to improve efficiency of internal capital market. The measures include financial management of enterprise-groups, internal governance structure and exterior governance structure of enterprise-groups.