Pyramid Structure, Internal Capital Market and Financing Substitution-Empirical Analysis Based Listed Family Companies in China

This paper adopts the scale of related party intern transaction to measure China listed family companies' intern capital market. This paper samples 303 China listed family companies from 2007 to 2008 to test the substitution effects between bank deposit and internal capital markets. The findings demonstrate that the scale of intern capital market is negatively correlate with bank deposit. The complex of pyramid structure is positive correlate with the scale of intern capital market. The conclusion gives a reasonable explanation why most of family listed enterprises in China adopt pyramid structure based on the substitution effects of the internal capital market.