The Theory Of Internal Capital Market’s Influence On The Enterprise Value

Based on the theory of internal capital markets and the empirical researchmethod, this article make researches on the effect of internal capital markets on thevalue of enterprises. The results of this article are as follows: First, according to thecash flow-sensitivity calculation method, the resource allocations in internal capitalmarkets is not so much efficient, at present, in our country there is only half of thelisted companies which have effective allocations of internal capital markets, theinternal capital markets can make a good influence on the rising value for enterprisesto some extent, this conclusions are basically consistent with the conclusions from thedomestic scholars. Second, the internal financial intermediaries are positivelycorrelated with the relative value of enterprise which the internal capital markets exist.The existence of the internal financial intermediaries can really improve the allocativeefficiency of internal capital markets, this shows that the finance companies duringthe enterprise group in our country really played a positive role. By unifying thefinancing, the transaction costs can be reduced, the pricing ability of the company canbe improved, also, the internal supervision role of the company can be utilized, andthese can all help to increase the value of the enterprise. Thirdly, the relative value ofenterprise where the internal capital markets exist is positively correlated with theenterprise scale, the degree of diversification. The larger of the enterprise’s scale,the greater the internal financial intermediaries can play a role, the higher of theefficiency of the allocation in internal capital market; the higher the degree ofdiversification of listed companies, the higher of the efficiency of the allocation ininternal capital market, the more the enterprises can be value-added.