Diversified Enterprise Value Lost From Theoretical And Empirical Research

Diversification operation is an important corporation strategy. Many corporations have to face the choice of diversification or specialization, while the basis of making that choice is which operation has positive effect on corporation value. We call it diversification discount if diversification operation harms corporation value. That is to say, diversification discount is that a whole corporation value is less than the sum of business units included in this corporation if they operate independently. Foreign academicians have expatiated diversification discount from many aspects, and bring forward relevant theories and empirical result.The thesis started with the economic base of diversification, and analyzed diversification form mechanism and advantage from aspect of finance, then educed the concept of diversification discount, and put forward its reason after reviewing and summarizing foreign academicians' research results. At the same time, penman used the samples of more than 1000 specialized list companies and 30 diversified list companies that went public in Shanghai Stock Exchange and Shenzhen Stock Exchange in 2003, and calculated the Excess Value(EV) of those companies.The empirical result indicated that diversification discount exists in the diversified list companies, Meanwhile, penman put forward the particular reason of diversification discount of Chinese companies, finally analyzed the shortage of that empirical research.