| "Should business enterprise be professional or diversified?", this is a problem which has not been resolved with great controversy, but in practice has an urgent need to be solved from the Rumelt's (1974) pioneering research. There are a large number of listed companies adopt diversified strategy in China, which are designed to rapidly expand the size of companies, improve the overall performance of the company, thereby increasing the strength of enterprises. But on the current situation, many listed companies adopt diversified strategy in different businesses. They not only did not improve the performance, but also beard a heavy burden or even bankruptcy. "Can diversification increase the performance of the company" has always caused wide public concern all over the world.As leading enterprises in the development of agricultural industrialization, agriculture listed companies listed under the various governmental preferential policies. Their fundamental aims should be to use the resources get from the stock market, support for the development of agriculture industrialization. Nevertheless, there is a serious situation that many agricultural listed companies lapse their business from agriculture. Lots of them adopt the diversified strategy, half of which extend their business scope into non-agriculture areas such as chemical industry, real estate, pharmaceutical and health, industry and other businesses. In order to avoid the inferior agricultural risk, they invest the capital which gets from the stock market to the high-return industry. But can this non-agriculture investment bring agricultural listed companies good operating performance? Even if bring good operating performance, as the leading enterprises in the development of agriculture industrialization, their primary task should be to play a guiding role in the development of China's agriculture industry. In diversification, can their main business of agriculture be high-speed developed? How does agricultural listed companies' non-agriculture behavior affect the country's development of agricultural industrialization?Based on these perspectives, This paper studies diversification management performance of agricultural listed companies, the main contents include: First, the theories of diversification and company performance are reviewed and the study by the domestic and foreign scholars on them is summarized, as well as the study about how agricultural listed companies support the development of agriculture industrialization; Second, we analyze the development of Chinese agriculture listed companies and the status quo of their diversification management, we also analyze their motives for the diversification management; three, we study of the mechanism that agricultural listed companies how to use the stock market to support the development of agriculture industrialization, in order to illustrate that the agricultural listed companies should make full use of the securities market to support the development of agriculture industrialization; four, we use 74 listed agricultural companies' data at the end of 2006 in Shanghai and Shenzhen securities market as samples to do empirical analysis. The companies' management performance is measured from both the financial and market, and the input in agriculture is measured through the development of the main agricultural business, thereby measuring how agricultural listed companies make use of the market to support the development of agriculture industrialization. The conclusions are as following: the agriculture listed companies adopt to non-agriculture industries is not conducive to improve management performance, and is not conducive to the development of agriculture industrialization; five, in accordance with the empirical results, we make a number of policy recommendations about how to change the non-agriculture investment phenomenon, including the Government's policy of encourage and restraint, listed companies' own strategies. |
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