Market Process Of Corporate Diversification And Performance

The rich foreign literature of diversity has provided the scope of diversification of Chinese listed companies to a useful strategic choice perspective, but at the same time, as the emerging markets and transition-economic characteristics of China, the West's diversity theory does not entirely explain the diversified management behavior and the consequences arising from the performance in the Chinese market.As based on the concept of institutional—based view and the Harvard Business School's SCP paradigm, this paper evolved into ICP mode, follow the "institution—conducts of diversification - performance of firm ".The logic paradigm means the institution affects behaviors, then the behaviors affect the results. From the theory of agency , transaction cost and the perspective view of government intervention, through systematically anglicizing the status of our market process and our state--owned listed companies'basis of diversified approach ,this paper is to discuss the impact of the market process to the diversification, and then ,the process by setting the market process to be multiplied with a wide range of interactive items, in an attempt to explore the market process through the diversification of the company's financial performance .With the development of China's market economy system, the stock companies have expanded, as well as the rapid development of state-owned company , the continuous expansion of business scale and the continuous improvement of the competitiveness make many enterprises take a diversified way. After the 2008 round of economic crisis, "the people back into the country" perfectly explain the phenomenon that the state-owned enterprises in China are busy in diversification .After the economic crisis, state-owned enterprises not only occurs in the realm of real estate, steel, energy, aviation and other economic pillar, while have been strengthened food sales which usually accounted for the main long-term private economic sectors. In the context of market economy, are the diversifications of state-controlled listed companies consistent with the market process? What links the two? How are the company's performance affected?Based on the above problems, this paper uses the standardizing research and empirical studies. As the standardizing research, this article is mainly aimed at home and abroad research, reviewed the literature, and describes the process of diversification and market-related basic theory. As the empirical part, this paper uses 90 Chinese cities of Shenzhen and Shanghai state holding listed companies as samples from the year 2007 to2009.The process according to the market index divided the total sample into two different sub-samples, then does the descriptive statistics of total sample and sub-sample, correlation analysis and fixed effect model of multiple regression analysis. Then respectively conducts the relationship between the process of the market and listed companies in China's state-owned, as well as the relationship between diversification and performance with an empirical study. The results show that the market process in areas with high diversity and high and low in areas of the market process, provide market process and diversification with a positive correlation; in the process of market performance in areas with higher diversity than in the process of low market area, on the premise of the same in the other conditions, with the improvement of market process, corporate diversity performance is also increased.