Empirical Researches On Corporate Diversification And Performance Based On The Entropy Value

Since the diversification concept is proposed, rapidly has been accepted by the enterprises and put to the practice, and has experienced several peaks. But to the 80's later periods, the diversification no longer received people's favor. Until the recent years, the diversification management again became many enterprises' important development strategy. But practices indicate, some enterprises implement were very successful, some actually appeared briefly. What type influence did the diversification management on the corporate performance has already become the important topic which scholars studied recently. But in China, the enterprise environment is very different from the western countries', studies on the relationship between these two are important. Therefore, the author takes the companies on Shanghai Security Market as sample for studies, to study the relational question between the diversification management and the corporate performance.The author obtains from the diversification management and the corporate performance meaning, and from economic angle, analyzes the relationship between diversification management and corporate performance, establishes a theory framework of the relationship between them.In the empirical study, this article selects the adjusted Return on equity (Ad-ROE) as the proxy variable which weights company value. When measuring diversification degree, the author uses the entropy statistic method, and thoroughly subdivides diversification type to weight the overall diversification horizon as well as the different type diversification, and the relationship between the different degree diversification and the corporate performance. The research indicates that diversification degree and corporate performance assume negative. The related diversification and corporate performance become positive, but the unrelated diversification and corporate performance is negative.According to the above conclusion, this article puts forward some suggestions how the companies implement the diversification strategy.