Research On The Relation Between Diversification And Performance Of Construction Enterprise In China

The enterprise is the main practitioner in the market. The enterprise management is directly related to enterprise survival and social stability. The relationship between diversification and performance is becoming more of a concern to researchers. The construction industry is one of the pillar industries in China. It is significant that to study the relationship between diversification and performance of construction enterprise. Therefore, this paper analyzed the relationship on theories at first. Then, the paper made the empirical study on relationship between diversification and performance, taking some listed construction enterprises in China as samples. The paper explored the research mechanism of relationship between diversification and performance and put forward suggestions according to the analysis results finally.The research status of the relationship between diversification and performance on domestic and foreign was reviewed. It was found that the researches conclusions based on different corporations cross-section data or mixed panel data were different, that the single index and the multiple indexes were the main method in the performance evaluation, that the business diversification was the main contents and the geographical diversification was less study, and that the study on construction enterprise was fewer. Therefore, the paper started from the definition of related concepts and clarified that the research of construction enterprise includes business diversification and geographical diversification and that the performance was represented by the comprehensive evaluation result. The paper presented the empirical research framework of relationship between diversification and performance on the basis of theoretical hypothesis.On the basis of analyzing features and defects of several common methods used to calculate the diversification and evaluate the performance, the method of diversification calculation and the theories, improved models and index system of performance evaluation of construction enterprise was presented. Herfindahl index, Entropy index and Wrigley category was used in the business diversification study. Herfindahl index, Entropy index and the percentage of total revenues from foreign sources was aused in the geographical diversification study. The performance of construction enterprise was comprehensive evaluated following as payoff ability, revenue growth, asset quality, debt risk and synthesised achievement through the Entropy method, Projection Pursuit method and Wavelet Neural Network model. The Immune Genetic Algorithm was taken to optimize the Projection direction for overcoming the shortcoming of the SGA in the Projection Pursuit method. The IGA-BP was taken to optimize the parameter for overcoming the shortcoming of the BP in the Wavelet Neural Network model. The works made the ready for the research the relationship between diversification and performance of construction enterprise.Taking some listed enterprises as the samples, empirical research on the relation between diversification and performance of construction enterprise in China was done. The compound index was computed for synthesizing the difference of Herfindahl index and Entropy index and analyzing the relationship conveniently in the diversification calculation. The performance values were divided into normal and abnormal through Cluster Analysis and the different measurements were taken to deal the abnormal value that influenced the result according to the features of different method in the study. The results of three methods were comparison and synthesis at last. The relationship between performance and diversification of compound index, interprovincial index and internationalization were analyzed one by one. The primary analysis method is scatting ered dots graph classification and the secondary method is regression. The conclusion was drawn by the Meta analysis based on the results of all samples. The importance of the sample in the Meta analysis was computed based on Entropy method according to the sequence length, distribution range and degree of dispersion of corporation diversification index.The suggestions were put forward according to the study results. The suggestions on the development and the diversification of construction enterprise were put forward according to the research results of the theory analysis and the empirical research. The deficiency of research was pointed out in the conclusion.