The Indication Effect Of Accounting Information In Corporate Strategy Transforming

This dissertation answers the question that what role accounting information plays in corporate strategy transforming process. By corporate strategy transforming, we mean the behavior that firms change their original specialization strategy or diversification strategy; this therefore indicates two specific forms: changing from specialization to diversification, or changing from diversification to specialization.Corporate strategy transforming is a key decisive issue that relates to corporate survival and development. On the one hand, in a constant changing environment, firms are repeatedly facing the question whether to change current strategy. If one can build theoretical relationship between accounting information and such transforming and provide relevant robust empirical evidence, one would render some operational and useful guidance in business practice. On the other hand, existing studies mainly stems from macro industrial or financial perspective; studies focusing on corporate characteristic are rare. Thus, taking a micro accounting information scope would enrich accounting theory as well as corporate strategy theory.Unlike prior Neo-classical studies which attempt to figure out which strategy, diversification or specialization, is better; this study focuses on the more fundamental issue on whether to change corporate strategy. This study employees evolutionary economics, which envisage corporate strategy transforming as a routine self-adjust searching/matching process; this type of decision could be best described as best ex ante decision that firm could make given centain "satisfying" benchmark, while ex post consequences can not be predicted precisely. An analytical model is built to clarify such evolutionary characteristic in corporate strategy transforming.Unlike prior studies which focus on the consequences of particular strategy, this study, as its first time, systematically examines the function that accounting information has in corporate strategy transforming ex-ante decision making. This study innovatively argues that accounting information reflects the routine gene of corporate evolution, indicates corporate strategy transforming. As its first time, this study builds a scientific and comprehensive methodological system: firstly, identifies five firms' sales based criteria to distinguish specialization and diversification samples according to pre-set strategy judging principles; secondly, generates the most relevant and the longest sample among other domestic studies; finally, adopts several different statistic and econometric methods to analyze observations that maintain their prior strategies and those changed their strategies to draw conclusions.In summary, main findings and conclusions are as follows.1. In listed Chinese A-share companies: the number of firms maintaining diversification strategy is reducing gradually; on the contrary, the number of firms maintaining strategy is increasing gradually; less and less firms changed their strategies, while firms changed to specialization are more than those changed to diversification. The strategical transforming trend towards stable and specialization indicates that emphasis of corporate strategy have been switched to concentrate on long-run competitiveness advantages, the depth of information and technique, the integration of resources, and the concentration of operating scope.2. Accounting information does have indicating ability. Operating capability shows both economic and statistical significant indicating ability during corporate strategy transforming process; Companies with lower operating capability are more likely to choose diversification. This empirical result not only gives support to theoretical inference which argues the indicating effect that accounting information has in corporate strategy transforming process, but also provide unprecedented new evidence to corporate strategy studies.3. Industrial and firms' shareholding characteristics affect corporate strategy transforming. Firms from competitive industries are more likely to change their strategies; Firms with a dominating shareholder are less likely to go for diversification. These do not change the indicator effect of accounting information though.