Diversification Of China's Listed Companies Performance Influencing Factors Research

As we all know, Chinese economy is now in transition, and the market-oriented changes of Chinese economic is the most striking in transition economies. Diversification business strategies and performance of Chinese listed companies will be impacted by changes in the external macro-environment inevitably. In order to understand the diversification strategies choice status quo of Chinese listed companies more clearly, this thesis make a statistic about the basic conditions of the companies which implement different diversification business strategies with descriptive statistics. In order to test whether there is significant difference among companies which implement different types of diversification business strategies, this thesis uses the number of business sectors (N) to distinguish the diversification into specialized, related diversification and non-related diversification and uses analysis of variance, Sub-group analysis to test the impact of the number of companies doing business to corporate performance. In order to test the market-oriented changes of Chinese economic have impact on the performance of companies which implement different diversification business strategies or not, this thesis uses indicators constructed by FanGang, Wang Xiaolu to measure the market changes of Chinese economic and uses analysis of ANOVA, Sub-group analysis, multiple regression ANOVA to examine the impaction that the relationship between the government and the market, the development degree of product market and elements market, the perfect extent of market intermediaries and the legal system have to the performance of the companies which implement different diversification business strategies. In order to test the request for the internal resources and capabilities of companies when implement different diversification business strategies in transition economies, this thesis makes the indicators which measure the market-oriented as control variables, uses multiple regression analysis examined the impaction that the tradable shares and non-tradable shares, company capital structure and the scale of company have to the companies which implement the different diversification business strategies.Through above test, this thesis found that: (1) The performance of companies with different diversification business strategies has significant difference. (2) The relationship between the government and the market, the development degree of product market and elements market, the perfect extent of the market intermediaries and the legal system have significant impact on the performance of the companies which have implemented three different diversification strategies, and subsequently through the multiple regression analysis to further explain that the companies which implement the specialized and related diversification business will be better suitable the market-oriented changes of Chinese economic than the company which have implement the non-related diversification strategies. As the deepening of the degree of Chinese economy's market-oriented which promote the development of non-related diversification, but it has a significant negative impact to the performance of the companies which implement the non-specialized. (3) Tradable shares and non-tradable shares have no impact on the performance of companies which implement different diversification strategies. The company capital structure (leverage coefficient) have significant positive impact on the performance of companies which have implement the specialized and related diversification strategies and have significant negative impact on the performance of companies which implement non-related diversification strategies. The scale of the companies have significant positive impact on the performance of companies which implement the specialized and related diversification strategies and have no significant impact on the performance of companies which implement related diversification, this shows that the larger scale of companies can actually provide a solid foundation of success for the implementation of non-related diversification strategies.