The Impact of the Parent Company on the Investment Activity of Capital Group Entities

Abstract

The paper explains the issues related to the investment policy and capital acquisition variants in a capital group. Operation in this integrated economic structure may increase the capabilities of its participants of acquiring finance for the purpose of executing investment projects. Related entities, apart from external financing related to providing capital from outside the capital group, may take advantage of internal financing in the group. The parent company, which may influence the decisions taken in subordinate companies, plays a significant role connected with planning investments and acquiring funds for their execution. The superior goal of this activity is implementing the strategy of the entire capital group aimed at maximising value for shareholders.