An Empirical Study Of The Diversification Of Listed Companies Effect On Business Performance-Case Study Of The Household Appliance Industry Of China

About the strategy of diversification effect on business performance, domestic and foreign businessmen and academic circles have commonly study between strategic management and economic and financial management .There has been keen more debates about the relation between strategy of diversification and enterprises performance. But the diversification discount has been accepted by more western scholars.The research of strategy of diversification impact on enterprises performance in china began to study in the1990s. at an elementary stage. Some scholars actively had researched the impact extent to diversity in the performance, and the impact of operational activities of diversification. Our study of the main consideration was concerned the model and type of diversification strategy. Especially there is lack of a specific industry for diversification in the performance of stability concern. Our real sense of the enterprises only a short span of thirty years of history, but American modern industrial enterprises more than 100 years of history. So our market and competitive environment is different from western countries, and diversification and performance in various industries are different. Our industry of household appliance is typically more representative, and it can reflect the rule of enterprise development of in Chinese market conditions. What is the relationship between the diversification of our household appliance industry and the performance? How should household appliance companies take the principle of diversification? This article mainly content as follows:The first chapter contains the research background, the meaning and purposes and methods and the main points.The second chapter contains the relevant theories of diversified management and performance reviewed including the definitions of diversification and the enterprise performance, and previous research on the relationship between the diversification and performance.The third chapter is motives for strategy of diversification. We reviewed the previous studies, and comments on them. Motives for Strategy of diversification also were analyzed. On the basis of previous studies we answered the motive of diversified development in the household appliance industry of china.The fourth chapter is the basis of Empirical Study. Choosing 34 home appliance companies listed as samples made analysis of demonstration. The conclusion is more than the proportion of 80% enterprises to adopt diversified operation.The sixth chapter is the conclusion of the paper. On the basis of descriptive statistics analysis, we made regression analysis. Results show that diversification is negatively related to corporate profitability and cash creation ability, but does not have relationship with the market performance. Demonstration is the diversification could cause discountFinally, we gave the conclusions and recommendations. Implementation of diversification strategy is the premise of company has transferable core ability, but less stable business growth. Diversification development strategic success depends to a great extent on the management capability. And enterprises should pursue economies of scale, but the scale of enterprises should be controlled in the range of right, and expand scope of resource sharing pursuing the synergy effect.