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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Autores:
Tipo de recurso:
Fecha de publicación:
2019
Institución:
Universidad del Rosario
Repositorio:
Repositorio EdocUR - U. Rosario
Idioma:
eng
OAI Identifier:
oai:repository.urosario.edu.co:10336/27812
Acceso en línea:
https://doi.org/10.1093/rof/rfz022
https://repository.urosario.edu.co/handle/10336/27812
Palabra clave:
G32 - Financing Policy
Financial Risk and Risk Management
Capital and Ownership Structure
Value of Firms
Goodwill
Rights
License
Restringido (Acceso a grupos específicos)
id EDOCUR2_36ad2338d2c8bb665bb58dc88bbb0497
oai_identifier_str oai:repository.urosario.edu.co:10336/27812
network_acronym_str EDOCUR2
network_name_str Repositorio EdocUR - U. Rosario
repository_id_str
spelling 3a3fd23e-33f5-4e2b-a64b-a823abb9f516-1f99e14bc-96ec-4e78-8c5e-545d8262378b-11f7c8ba3-aa85-4cbc-bd77-1c87a8a7147b-13acca0d1-acbc-4bf8-b908-7a0c52bc5373-12020-08-19T14:44:01Z2020-08-19T14:44:01Z2019-10-18We 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.application/pdfhttps://doi.org/10.1093/rof/rfz022ISSN: 1572-3097EISSN: 1573-692Xhttps://repository.urosario.edu.co/handle/10336/27812engOxford University Press889No. 4847Review of Finance European Finance ReviewVol. 24Review of Finance European Finance Review, ISSN: 1572-3097; EISSN: 1573-692X, Vol.24, No.4 (July, 2020); pp. 847-889https://academic.oup.com/rof/article-abstract/24/4/847/5593666?redirectedFrom=fulltextRestringido (Acceso a grupos específicos)http://purl.org/coar/access_right/c_16ecReview of Finance European Finance Reviewinstname:Universidad del Rosarioreponame:Repositorio Institucional EdocURG32 - Financing PolicyFinancial Risk and Risk ManagementCapital and Ownership StructureValue of FirmsGoodwillHow Do Internal Capital Markets Work? Evidence from the Great Recession¿Cómo funcionan los mercados de capitales internos? Evidencia de la Gran RecesiónarticleArtículohttp://purl.org/coar/version/c_970fb48d4fbd8a85http://purl.org/coar/resource_type/c_6501Buchuk, DavidLarrain, BorjaPrem, MounuUrzúa Infante, Francisco10336/27812oai:repository.urosario.edu.co:10336/278122021-06-03 00:51:00.743https://repository.urosario.edu.coRepositorio institucional EdocURedocur@urosario.edu.co
dc.title.spa.fl_str_mv How Do Internal Capital Markets Work? Evidence from the Great Recession
dc.title.TranslatedTitle.spa.fl_str_mv ¿Cómo funcionan los mercados de capitales internos? Evidencia de la Gran Recesión
title How Do Internal Capital Markets Work? Evidence from the Great Recession
spellingShingle How Do Internal Capital Markets Work? Evidence from the Great Recession
G32 - Financing Policy
Financial Risk and Risk Management
Capital and Ownership Structure
Value of Firms
Goodwill
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
dc.subject.keyword.spa.fl_str_mv G32 - Financing Policy
Financial Risk and Risk Management
Capital and Ownership Structure
Value of Firms
Goodwill
topic G32 - Financing Policy
Financial Risk and Risk Management
Capital and Ownership Structure
Value of Firms
Goodwill
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.
publishDate 2019
dc.date.created.spa.fl_str_mv 2019-10-18
dc.date.accessioned.none.fl_str_mv 2020-08-19T14:44:01Z
dc.date.available.none.fl_str_mv 2020-08-19T14:44:01Z
dc.type.eng.fl_str_mv article
dc.type.coarversion.fl_str_mv http://purl.org/coar/version/c_970fb48d4fbd8a85
dc.type.coar.fl_str_mv http://purl.org/coar/resource_type/c_6501
dc.type.spa.spa.fl_str_mv Artículo
dc.identifier.doi.none.fl_str_mv https://doi.org/10.1093/rof/rfz022
dc.identifier.issn.none.fl_str_mv ISSN: 1572-3097
EISSN: 1573-692X
dc.identifier.uri.none.fl_str_mv https://repository.urosario.edu.co/handle/10336/27812
url https://doi.org/10.1093/rof/rfz022
https://repository.urosario.edu.co/handle/10336/27812
identifier_str_mv ISSN: 1572-3097
EISSN: 1573-692X
dc.language.iso.spa.fl_str_mv eng
language eng
dc.relation.citationEndPage.none.fl_str_mv 889
dc.relation.citationIssue.none.fl_str_mv No. 4
dc.relation.citationStartPage.none.fl_str_mv 847
dc.relation.citationTitle.none.fl_str_mv Review of Finance European Finance Review
dc.relation.citationVolume.none.fl_str_mv Vol. 24
dc.relation.ispartof.spa.fl_str_mv Review of Finance European Finance Review, ISSN: 1572-3097; EISSN: 1573-692X, Vol.24, No.4 (July, 2020); pp. 847-889
dc.relation.uri.spa.fl_str_mv https://academic.oup.com/rof/article-abstract/24/4/847/5593666?redirectedFrom=fulltext
dc.rights.coar.fl_str_mv http://purl.org/coar/access_right/c_16ec
dc.rights.acceso.spa.fl_str_mv Restringido (Acceso a grupos específicos)
rights_invalid_str_mv Restringido (Acceso a grupos específicos)
http://purl.org/coar/access_right/c_16ec
dc.format.mimetype.none.fl_str_mv application/pdf
dc.publisher.spa.fl_str_mv Oxford University Press
dc.source.spa.fl_str_mv Review of Finance European Finance Review
institution Universidad del Rosario
dc.source.instname.none.fl_str_mv instname:Universidad del Rosario
dc.source.reponame.none.fl_str_mv reponame:Repositorio Institucional EdocUR
repository.name.fl_str_mv Repositorio institucional EdocUR
repository.mail.fl_str_mv edocur@urosario.edu.co
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