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The Role of Internal Capital Market in Business Groups

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The Palgrave Handbook of Managing Family Business Groups

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Abstract

The aim of this chapter is to discuss the role played by the internal capital market in business groups, the results so far achieved by the literature and to open new lines of research on how these internal flows influence the relations between companies belonging to the same group and in particular the relation between the head and its subsidiaries. The internal capital market may play a dual role. The first is that the presence of internal capital flows within a group can make it easier for companies to survive an external shock, such as an economic-financial crisis. The second is that the internal capital market facilitates the allocation of resources to investment projects, in particular innovative projects, for which it could be difficult to raise external funds. Most of this literature is focused mainly on large groups, undervaluing the relevance and the implications of small and medium-sized business groups.

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Authors and Affiliations

  1. Centre for Innovation and Entrepreneurship, Polytechnic University of Marche, Ancona, Italy

    Valentina Giannini & Donato Iacobucci

Authors
  1. Valentina Giannini
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  2. Donato Iacobucci
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Correspondence to Valentina Giannini .

Editor information

Editors and Affiliations

  1. School of Engineering Science, LUT University, Lahti, Finland

    Marita Rautiainen

  2. Department of Strategy and General Management, ESADE Business School, Sant Cugat del Vallès, Spain

    Maria José Parada

  3. School of Engineering Science, LUT University, Lahti, Finland

    Timo Pihkala

  4. Jönköping International Business School (JIBS), Jönköping, Sweden

    Naveed Akhter

  5. Department of Entrepreneurship and Strategy, Lancaster University Management School, Lancaster, UK

    Allan Discua Cruz

  6. Department of Organisation Behavior and Human Resources Management, Indian Institute of Management Indore (IIM), Indore, India

    Kajari Mukherjee

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Giannini, V., Iacobucci, D. (2023). The Role of Internal Capital Market in Business Groups. In: Rautiainen, M., Parada, M.J., Pihkala, T., Akhter, N., Discua Cruz, A., Mukherjee, K. (eds) The Palgrave Handbook of Managing Family Business Groups. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-13206-3_3

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