Ownership Structure and Internal Capital Allocation in Group
The paper presents a capital allocation model in business group in which ownership structure is added. The results show that external capital market and internal capital market are interacted. Internal capital market is more developed when external capital market is less developed, and the legal protection to investors is weak. Based on maximization of controlling shareholder wealth, CEO inclines to allocate internal capital to the less effective affiliated firms. Ownership structure is an important factor in internal capital allocation. Under pyramidal structure, the more divergence between control right and cash flow right, the more possibility to be allocated internal capital at the cost of the benefit of minority shareholders. The capital allocated to affiliated firm affects the level of effect exerted by the manager. The value of affiliated firms is determined by both the amount of capital allocated and managers efforts. The group value is determined by the value of affiliated firms.
Ownership Structure Internal Capital Market Internal Capital Allocation Group Value
Shao Jun Liu Zhiyuan Chai Qingfu
Shanghai Lixin University of Commerce, Shanghai, P.R.China, 201620 School of Business of Nankai University, Tianjin, P.R. China, 300071
国际会议
北京
英文
662-665
2010-11-27（万方平台首次上网日期，不代表论文的发表时间）