Research On The Efficiency Of Internal Capital Market In HNA Group

The internal capital market occupies a very important position in the development of modern enterprise groups.The survival and development of enterprise groups are inseparable from good capital operations.At present,China is still in the period of economic transformation,and the capital market is relatively sluggish.Enterprise groups are facing many restrictions in terms of financing channels,fiscal and tax support,and market evaluation.In particular,the effectiveness of external capital markets in financing has also been seriously affected,because Information asymmetry and agency problems,external financing needs to bear greater financing risks and high transaction costs.As a result,enterprise groups have created internal capital markets to alleviate the pressure of external capital market financing constraints and optimize resource allocation.However,due to reasons such as the incomplete capital market in my country,the preference of the group for the pyramidal shareholding structure,and the imperfect corporate governance structure,the efficiency of the internal capital market is low,such as uncontrolled expansion,excessive investment,and cross-subsidies.Therefore,it is of great practical significance to study the internal capital market efficiency of enterprise groups and its influencing factors for the development of enterprise groups.In recent years,with the development of world economic integration,competition has become fiercer,economies of scale have become more respected by enterprises,and more and more enterprises have chosen a group-based operation mode.The case study in this article,HNA Group,has expanded rapidly through diversified development since its establishment,and has formed a perfect internal capital market including HNA Finance Company.However,in 2017,the HNA Group entered the stage of rapid decline in industry contraction and business adjustment due to the tight capital chain,which provided a typical case for the in-depth analysis of the role of the internal capital market in the development of enterprise groups.Specifically,this article first systematically sorts out the current internal capital market related literature,summarizes and summarizes existing views,and proposes the research ideas and methods of this article;second,clarifies the concept,significance,efficiency evaluation methods and influencing factors of the internal capital market In-depth analysis of the theoretical basis;using case analysis methods to analyze the construction process and operation mode of HNA Group's internal capital market,using cash flow sensitivity method,cash flow sensitivity method basedon the return of assets in the previous period and adjusted profit sensitivity method for efficiency measurement;Combined with the actual operating situation,we deeply analyzed its impact on the internal capital market efficiency from four angles of diversification,corporate governance structure,enterprise scale and internal capital platform;reached a conclusion and put forward reasonable suggestions to optimize the efficiency of HNA Group's internal capital market,And sum up the experience and enlightenment for other private enterprise groups to optimize the internal capital market.Through case analysis,this article concludes that HNA Group's overall internal capital market is inefficient and invalid in individual years,indicating that HNA Group has not fully utilized the internal capital market.At the same time,the HNA Group's principle of resource allocation in the internal capital market is strategic priority,the shareholding structure is relatively complicated and cross-subsidies are prone to occur,and the rapid expansion of scale leads to tight capital chains.Therefore,this article puts forward practical empirical revelations:(1)The development strategy of enterprise groups should be from excessive diversification to moderate "reversion";(2)The principle of internal capital market allocation should follow efficiency priority rather than strategic priority;(3)Regulate intra-group related party transactions and information disclosure systems of branch companies;(4)Improve the functions of internal capital platforms to prevent the breakage of the internal capital chain of the group;(5)Strengthen the supervision of capital markets and give play to the synergies between internal and external capital markets.The contribution of this article is mainly reflected in:(1)Previous research on the efficiency of the internal capital market of China's enterprise groups mainly focused on state-owned enterprises,and less analysis from the perspective of private enterprises.It has enriched the research literature of enterprise group's internal capital market.(2)Previous research on China's internal capital market mainly focused on theoretical methods,and this paper combined case studies and normative research to study the internal capital market efficiency of private enterprise groups,which can provide private enterprise groups with the optimization of internal capital market efficiency Certain experience.