The Relationship Of Equity Structure And Diversification: An Empirical Study Based On Listed Firms In China

From 90th age of last century, many companies began to pursue diversfication in China. As well diversification became a hot concern in theory research. This dissertation introduces the equity structure and corporate governance theory, then compares the listed companies' equity structure differences between China and other countries. After that, we search into the motivation of diversification at the level of agency relationship, and discuss the diversification effect on firm performance.This dissertation tries to conduct multi-variable regression analysis on the relation between equity structure and diversification by collecting the related data from listed companies in 2006. We find: diversification level is negatively related to state shares and the first big shareholding ratio. And it has no significant relationship to legal person shares. These Empirical findings show that state shares are big problems in listed companies'equity structure.As conclusion of this paper, we suggests that reducing state shares appropriately to build more reasonable equity structure. Also we need to further consummate corporate governance, and make legal person investors have a strong effect in corporate governance and make diversification play the role efficiently.