Two motivations of internal financing in business groups are studied using Chinese data: cross-financing to relieve severe financing constraints, and expropriation from minority shareholders in environments with weak corporate governance. The authors document the existence of both, and discuss their implications on both the efficiency and magnitude of intra-group financing. The authors find that, from the business group perspective, the internal capital market is most efficient when the groups are well governed and have a pressing need to mitigate external financing constraints.

Introduction in Chinese:

http://www.saif.sjtu.edu.cn/index.php/AboutSaif/ShowContent/news_id/1174

Speaker Personal Information:

Homepage： http://ihome.cuhk.edu.hk/~b109671/index.html

Research Interest：Corporate Governance; Corporate Finance; Organizational Economics