Study On The Efficiency Of Internal Capital Market Operation Of The Focus Faction Group Under The Combined Industry And Financing Model

With the development of the economy and the increasing competition in the market,companies set up faction groups through mergers and acquisitions in order to improve their overall competitiveness.Thereafter,in order to improve the efficiency of capital allocation,internal capital markets were created,and the internal capital markets of the faction groups were able to alleviate the financing pressures,operational pressures and investment distortions they faced.At the same time,the high remuneration rate of the financial sector attracts a large number of real economy companies to participate in the market,and many faction groups integrate industrial and financial capital by setting up finance companies and holding equity in other unlisted financial enterprises,which affect the efficiency of the internal capital market of faction groups in different ways.This paper examines the efficiency of the internal capital market operation of the Fosun group through a case study,with a view to improving the efficiency of the internal capital market operation of the Fosun group and other family groups in China.Based on the background of the development of the internal capital market of the faction group under the combination of industry and finance model,this paper selects the Fosun group as a case faction group and analyses the efficiency of the internal capital market of the Fosun group under the combination of industry and finance model,based on a review of relevant studies at home and abroad and a summary of the main concepts and theories.This paper summarises the process of building the internal capital market of the Fosun group,the different models of combining industry and finance and their effectiveness,and the specific operation of the internal capital market of the Fosun group under the combined industry and finance model.The efficiency values were compared with all faction groups in China,as well as private faction groups that have implemented the combination of industry and finance.The results show that in the 10 years from 2011 to 2020,the internal capital market of Fosun was effective in seven years,and the efficiency values were significantly higher than the average values of all the faction groups in China.The paper summarizes the experience of effective internal capital market operation,mainly because the combination of industry and finance improved the efficiency of capital use and the deep integration of industry and finance promoted the allocation of capital.The internal capital market operation of the Fo sun Group was ineffective in three years,further analysis of the reasons for the ineffectiveness of internal capital market operations in the Fosun group is mainly due to the risks caused by the combination of industry and finance,the unequal distribution of resources exacerbated by the combination of industry and finance and the lack of supervision of capital by Fosun’s finance company over the listed companies of the Fosun group.Based on the above analysis,this paper proposes that in the next stage,the Fosun group should improve the synergy effect of financial enterprises,improve the financial service system and avoid potential risks,as well as improve capital allocation,strengthen capital supervision and enhance the supervision mechanism.So as to improve the industry-financing combination model and improve the efficiency of the faction group’s internal capital market operation,which will also serve as an inspiration for other faction groups in China to formulate an industry-financing combination strategy and achieve a more efficient internal capital market operation.