The Theory and Practice of Capital Allocation

DOI

10.2991/978-94-6463-036-7_97How to use a DOI?

Keywords

internal capital allocation; internal capital market; capital allocation efficiency

Abstract

Internal capital allocation is one of the core propositions in the business process of multi-divisional conglomerates and is an essential factor affecting the survival and growth of firms. However, the internal capital allocation decision is intrinsically complex, and the existing research literature has multiple theoretical orientations, there are also large gaps in empirical findings and varying measures of allocation efficiency. This paper firstly summarizes the theoretical basis of internal capital allocation decisions and discusses the commonalities and differences between the theories. Secondly, it sorts out the factors affecting internal capital allocation decisions and discusses the reasons for the lack of consistency in the empirical results. Finally, it discusses the future research directions based on the selection of allocation efficiency measurement methods and moderating variables.

Copyright

© 2022 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Bohan Wang
PY  - 2022
DA  - 2022/12/31
TI  - The Theory and Practice of Capital Allocation
BT  - Proceedings of the 2022 2nd International Conference on Economic Development and Business Culture (ICEDBC 2022)
PB  - Atlantis Press
SP  - 648
EP  - 654
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-036-7_97
DO  - 10.2991/978-94-6463-036-7_97
ID  - Wang2022
ER  -