How Do Internal Capital Markets Work? Evidence from the Great Recession
We study the inner workings of internal capital markets during the 2008–09 recession using a unique dataset of loans between business group firms in an emerging market. Intragroup loans increase quickly during the recession. Firms that are more central in the ownership network simultaneously increas...
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| Formato: | Artículo (Article) |
| Lenguaje: | Inglés (English) |
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Oxford University Press
2019
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| Acceso en línea: | https://repository.urosario.edu.co/handle/10336/27812 https://doi.org/10.1093/rof/rfz022 |
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ir-10336-278122020-08-19T14:44:01Z How Do Internal Capital Markets Work? Evidence from the Great Recession ¿Cómo funcionan los mercados de capitales internos? Evidencia de la Gran Recesión Buchuk, David Larrain, Borja Prem, Mounu Urzúa Infante, Francisco G32 - Financing Policy Financial Risk and Risk Management Capital and Ownership Structure Value of Firms Goodwill We study the inner workings of internal capital markets during the 2008–09 recession using a unique dataset of loans between business group firms in an emerging market. Intragroup loans increase quickly during the recession. Firms that are more central in the ownership network simultaneously increase lending and borrowing. Acting like simple intermediaries, central firms do not increase net lending. Our results imply that formal control rights are essential for intermediation in internal capital markets, particularly during distress. In line with previous results on winner-picking, receivers of intragroup loans are high-Q, financially constrained firms, which also perform significantly better than providers during the recession. 2019-10-18 2020-08-19T14:44:01Z info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion ISSN: 1572-3097 EISSN: 1573-692X https://repository.urosario.edu.co/handle/10336/27812 https://doi.org/10.1093/rof/rfz022 eng info:eu-repo/semantics/restrictedAccess application/pdf Oxford University Press Review of Finance European Finance Review |
| institution |
EdocUR - Universidad del Rosario |
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DSpace |
| language |
Inglés (English) |
| topic |
G32 - Financing Policy Financial Risk and Risk Management Capital and Ownership Structure Value of Firms Goodwill |
| spellingShingle |
G32 - Financing Policy Financial Risk and Risk Management Capital and Ownership Structure Value of Firms Goodwill Buchuk, David Larrain, Borja Prem, Mounu Urzúa Infante, Francisco How Do Internal Capital Markets Work? Evidence from the Great Recession |
| description |
We study the inner workings of internal capital markets during the 2008–09 recession using a unique dataset of loans between business group firms in an emerging market. Intragroup loans increase quickly during the recession. Firms that are more central in the ownership network simultaneously increase lending and borrowing. Acting like simple intermediaries, central firms do not increase net lending. Our results imply that formal control rights are essential for intermediation in internal capital markets, particularly during distress. In line with previous results on winner-picking, receivers of intragroup loans are high-Q, financially constrained firms, which also perform significantly better than providers during the recession. |
| format |
Artículo (Article) |
| author |
Buchuk, David Larrain, Borja Prem, Mounu Urzúa Infante, Francisco |
| author_facet |
Buchuk, David Larrain, Borja Prem, Mounu Urzúa Infante, Francisco |
| author_sort |
Buchuk, David |
| title |
How Do Internal Capital Markets Work? Evidence from the Great Recession |
| title_short |
How Do Internal Capital Markets Work? Evidence from the Great Recession |
| title_full |
How Do Internal Capital Markets Work? Evidence from the Great Recession |
| title_fullStr |
How Do Internal Capital Markets Work? Evidence from the Great Recession |
| title_full_unstemmed |
How Do Internal Capital Markets Work? Evidence from the Great Recession |
| title_sort |
how do internal capital markets work? evidence from the great recession |
| publisher |
Oxford University Press |
| publishDate |
2019 |
| url |
https://repository.urosario.edu.co/handle/10336/27812 https://doi.org/10.1093/rof/rfz022 |
| _version_ |
1676074255529279488 |
| score |
11,382149 |