Internal Capital Market Efficiency of Belgian Holding Companies

Axel Gautier () and Hamadi Malika
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Hamadi Malika: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 2004037, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: In this paper, we raise the following two questions : (1) do Belgian holding companies operate an internal capital market to transfer financial resources in between their subsidiaries ? And if yes, (2) is the internal capital market efficient ? To answer the first question, we check if the group cash flow is a determinant of the investment’s spending of group members. The answer is positive if the holding’s subsidiary is affilliated to a coordinate center and negative otherwise. To answer the second question, we evaluate if internal transfers are driven by efficiency. From our estimations, we cannot conclude that Belgian Holding companies have an efficient internal capital market.

Keywords: Investment; Holding; Internal capital market (search for similar items in EconPapers)
JEL-codes: G31 (search for similar items in EconPapers)
Date: 2005-01-01
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Citations: View citations in EconPapers (3)

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http://sites.uclouvain.be/econ/DP/IRES/2004-37.pdf (application/pdf)

Related works:
Journal Article: Internal Capital Market Efficiency of Belgian Holding Companies (2005)
Working Paper: Internal capital market efficiency of Belgian holding companies (2005)
Working Paper: Internal capital market efficiency of Belgian holding companies (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvec:2004037

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