Study On The Relationship Of Diversification Strategy, Agency Conflict And Corporate Performance

Diversification refers to the scope of business beyond its original business areas while atthe same time operating more than one industry, business strategy or growth behavior.Corporate diversification is a controversial topic in the theoretical world, many scholars of thephenomenon of the diversification discount the explanation that due to the inefficiency ofinternal capital markets lead to a diversified allocation of resources did not play with thetheoretically should have advantage. There are many scholars departure from the agencyproblem to explain the diversification discount phenomenon, but rarely empirical examinationof agency conflicts and the relationship of the degree of diversification. And almost nodiversification strategy, agency conflicts and corporate performance among a comprehensiveand systematic analysis. Diversification strategy on behalf of the agent of the relationshipbetween conflict and corporate performance systems research, analysis of agency problems onthe diversification of the company to select impact, as well as the company diversified agencycosts, agency efficiency and corporate performance, pointing out that ideas to solve theproblems brought about by the company diversified in order to achieve an active role incorporate decision-making in business management.Theory of agency theory to explain the choice of diversification strategy, the scope ofeconomic theory, the theory of venture capital, transaction costs theory, the paper studies theagency theory of corporate diversity issues. Their research has two main aspects: First, theproblem of agency management diversification strategy choice, which the three theoriesrelevant factors, and other influencing factors as control variables, a multiple linear regressionmodel. Is based on agency theory, the relationship between research and diversificationstrategy, and agency conflicts and corporate performance, and build the model tested, andfinally the diversification discount of listed manufacturing companies in China mainly due todiversification to increase the agency conflict, manifested in two aspects: the increase ofagency costs and low agent efficiency, and ultimately affect the business performance. Thispaper selects the Shanghai A-share companies in the manufacturing industry in the2008-2010research for the study sample, using Spss Statistical Software empirical analysis, and theempirical results of the robustness test.Get the following conclusions:(1) the degree of diversification and agency costs are related, and agent efficiency and negatively related to diversity;(2) negatively related toagency costs and corporate performance, agent efficiency and corporate performance arepositively correlated;(3) the degree of diversification negatively correlated with corporateperformance;(4) Proxy conflict between diversification and corporate performance from thepart of the intermediary role. Finally, the inspiration and advice based on the results ofempirical analysis.