Research About The Diversification Of Revenue Structure,Operating Performance And The Risk Of Chinese Innovative Securities Firms

Securities firms, as intermediary service institutions in capital market, play a key role to improve the efficiency of the market. With continuous changing in current economic situation at home and aboard, Chinese securities firms face increasing challenges. On one hand, the development of Bank, insurances and trusts compressed securities firm’s living space, on the other hand, foreign investment institutions intensify the competition in the capital market, Securities firms, Which rely on traditional business, need to diversify their business and innovate financial products.Assets investment demand has been brought by rapid increasing in national wealth. Multi-level capital market construction has been needed by the adjustment of economic structure. In respond to these phenomenons. Products and business innovation has become necessary for domestic securities firms to strive for the survival, promote development and create core competitiveness. Securities firms break through the traditional scope of business, realize from traditional fee-based mediation to capital intermediary, which is combination of subjective and objective need. To transform from traditional business into innovative business will bring tremendous impacts in securities industry and capital market.Chapters II and III, the first part, first to define the relevant concepts, and described in detail for the concept of revenue structure diversification of Chinese securities firms, combined with the current situation in our county, author defines the relevant concepts. Subsequently, we elaborate several major theories on the diversified business performance and operational risks. In Chapter Ⅲ, we analyze the current situation and problems of Chinese securities firms business. and use quantitative indicators to measure the degree of diversification of innovative securities. at last, we find that business diversification in innovative securities is moving forward steadily. In particular, The bigger the security firm is, The faster progress and better effect the diversified business is.The fourth chapter, which is the part of the empirical research, is the core content of this article. I analyze the relationship between business diversification, operating performance and risk. After the empirical research by the panel data of28chinese innovative securities firms in seven years from2005to2011, we conclude that revenue structure diversification has a certain positive impact on operating performance of innovative securities. We find in recent years, Chinese securities’ asset size, ownership concentration and operating performance aer positively correlated relationship. Which means the greater the securities’ asset is, the higher the proportion of largest shareholder is, the better the operating performance of securities is. Reflecting the economies of scale and efficiency of management. But the leverage ratio for securities’ performance effect is not significant. It is found that business diversification reduce the risk of income by our correlation analysis on revenue structure diversification and operating risk.The last Chapter is part of the policy recommendations. On the basis of the conclusions in the second part, we make recommendations form the related law system, external supervision policy and internal corporate governance structure. Hope to promote Chinese securities’ business transformation.