01761cas a2200265 a 4500 AALejournalIMF019319 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498314411 1018-5941 BD-DhAAL BD-DhAAL Shi, Yu. Internal Capital Markets in Business Groups and the Propagation of Credit Supply Shocks / Yu Shi, Robert Townsend, Wu Zhu. Washington, D.C. : International Monetary Fund, 2019. 1 online resource (39 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Using business registry data from China, we show that internal capital markets in business groups can propagate corporate shareholders' credit supply shocks to their subsidiaries. An average of 16.7% local bank credit growth where corporate shareholders are located would increase subsidiaries investment by 1% of their tangible fixed asset value, which accounts for 71% (7%) of the median (average) investment rate among these firms. We argue that equity exchanges is one channel through which corporate shareholders transmit bank credit supply shocks to the subsidiaries and provide empirical evidence to support the channel. Mode of access: Internet Townsend, Robert. Zhu, Wu. IMF Working Papers; Working Paper ; No. 2019/111 Full text available on IMF http://elibrary.imf.org/view/journals/001/2019/111/001.2019.issue-111-en.xml IMF e-Library