Diversification management is company's important developmental strategy, has the important influence to the company achievements. The Chinese empirical analysis of diversification mainly concentrated in the overall listed company's and did not reflect industry characteristics. This paper examines the effect of diversification on firm value by the regressing analysis and case study. From the data of listed companies in food and drink industry during 2004-2006, this paper researches the relations between diversification and firm value. The results indicate that the diversification has a negative effect on firm value, and the state-owned shares and equity concentration strengthen the negative effect. The diversification leads a result of damaging the interests of firm and minority shareholders. A case study on"WuLiangYe"proves the results. |