Study On The Affecting Factors And Economic Consequences Of Coal Enterprises Diversification

Diversification strategy is suggested by the famous product marketing strategy masterAnsoff in the last century50’s, with the increasingly fierce market co mpetition, the enterprisescale unceasing expansion, diversification has become a development trend of modernenterprises. Coal is the main energy in China, the development of the coal industry has a veryimportant and special significance to China’s natio nal economy. Because coal resources can beexhausting and non renewable, the development of coal enterprises are facing a severe test,diversification is the only way which must be passed for sustainable development of coalenterprises; The coal industry after entering the "winter period", facing three difficulties: lack ofinternal production power, no external demand and import coal impact, diversification hasbecome an important means of many coal enterprises to meet the challenges in the newsituation.But what factors affected the level of diversification and if diversification can improvebusiness performance has not been possible to reach the same conclusion. So the study ofinfluence factors and economic consequences of coal diversification have both theoretical andpractical significance.Firstly, The paper defines the concept of diversity and corporate performance, combed thestudy of factors for diversification, relations between diversification and performance,diversification of coal companies and so on. And the describe of motivation theory and effecttheory of diversification as the theoretical basis for the following research.Secondly, it analyzes the status, characteristics and problems of diversification in coalindustry. We found that most of coal enterprises had develop diversified business, and in relateddiversification dominate, existing underpowered, low economic efficiency in diversification atthe same time.Then, we based on diversified motivation theory and effect theory, analysis t he influencefactors of coal enterprise diversification and the impact on corporate performance, so proposedhypothesis. We select30listed coal companies as research object, sort out data from AnnualReport of2008-2012by hand, using diversity entropy, the number of industries and Herfindahlindex to measure the level of corporate diversification. The regression analysis model build tostudy the diversification of coal enterprises and size, debt level, ownership concentration andgrow ability. And select ROE and the level of diversification to study the relationship betweendiversification and corporate performance.Finally, the use of SPSS statistical analysis software to test the factors and economicconsequences of coal enterprise diversification. Thro ugh correlation and regression analysis toverify the scale, debt level, ownership concentration and the growth ability how to influence the diversification, and ROE to analyze the effect of diversification. The results showed that: size,debt level, ownership concentration and the ability of growth had a significant impact on thediversification of coal enterprises. Size and the ability of growth had a positive influence ondiversification, while debt level and ownership concentration were negative. We also founddiversified level is negatively related to firm performance under coal enterprise, as is to say, theexistence of "diversification discount" in the coal industry,and this "discount" effect has a lag.At last, based on the problems and empirical results,we make recommendations for the coalenterprises to carry out the strategy of diversification.