Ruminate the Significance of Internal Capital Market to enterprise capital control

Abstract

Internal capital market theory is one of the most essential theories for studying the internal management of enterprises. It fundamentally solves the problem of information asymmetry in the external market and optimizes the internal resource allocation of enterprises while reducing transaction costs. This paper analyzes the impact of internal capital allocation and endogenous financing from the perspective of internal capital market theory which improve the centralized management of corporate capital and enhance the overall value of corporate groups.