An Empirical Study On The Relationship Between Diversification And Performance Of Listed Corporations In China

It is crucial for corporations to select a proper development mode in competitive market. Diversification has been one of the most popular development modes that corporations all over the world have pursued since 1960's and one of the important phenomena arising from fast-developing Chinese economy.Diversification is a choice of corporations who want to occupy more existent space when they grow up to a certain degree. Many factors may impact diversification strategy. Meantime, many corporations in abroad and home have overlooked this stage of development. As a result, most of them have failed. On the base of current theories, this paper analyzes relationship between diversification and performance.There are three tentative innovative points in this paper. Firstly, the critical successful factors of diversification strategy were listed. Secondly, it analyzes the relationship between corporations diversification and financial and market performance indicators by using the annals of listed corporations in 2003, which include the data of different industries. Thirdly, it also examines the economic performance of Chinese ST listed corporations and designs the measure index system of diversification strategy and economic performance. Moreover, it adopts empirical study on the relationship between them through the approaches such as regression model, variance analysis. It attempts to seek for the diversification development mode fit for Chinese corporations so as to enhance economic performance. According to that, this paper makes some suggestions to our country's corporations.