Research On Diversification Strategy Of Listed Companies And Corporate Value

Diversification as a strategic choice has been attached great importance to the business community in national current unbalanced market system. The enterprise can expand the scale and leap to a well-known one through diversification or come to decline because of the failure of diversification. Since the Scholars from the United States found that there was a significant diversification discount in listed companies for the first time, many scholars have been persistently researching on the relationship between the diversification and firm value all these years. Until now it has formalized different points of view: Versification Discount, Value Equilibrium , Diversification Premium.At present, most of the research based on the strategic viewpoint that discussed the firm value on diversification of listed companies. There are also many empirical test on diversification of listed companies, but the present research on it can't sufficiently explain how the level of business and type of diversification to impact on the enterprise value. They didn't sufficiently concern about the Causal relationship between diversification and firm value evaluation.This paper invested the relativity between the firm value evaluation and diversification from the view of the degree of diversification and diversification strategy. Taking stock market data from 2004 to 2007 on a sample, the diversification's effects on market value and financial value are tested by regression analysis and T–test. First we take the firm value as dependent variable, take four controlled variable to have a regression analysis .then based on the above analyses, we take further regression analysis with the degree of diversification as dependent variable.Though the regression analysis of the degree of diversification, the profitability of the enterprise and the expending ability, Non-related diversification strategy and corporate value was significantly positive correlation, And the related diversification strategy and corporate values were significantly negative correlation. The degree of diversification and enterprise development strategy was a negative correlation.