Performence Of Agricultural Listed Company From Diversification Strategy Perspective

In30years of reform and opening up, agriculture has developed greatly. Agriculturallisted companies as a representative of the advancement and the flagship of the agriculturalindustry, is an important sector in the history of Chinese securities market, and its sustained,stable and healthy development not only is an important link in the securities market, is also ameasure of macroeconomic indicators. However, due to its own characteristics, such as theperiodicity of agricultural production, the influence of the natural conditions and the slowereffective and so on, restricts the growth of the enterprise. At the same time, the externalenvironment, such as market environment, macroeconomic policies and so on is also affectingthe development of agricultural listed companies. So in order to adapt to the increasinglyfierce market’s competition, complex macroeconomic situation, and overcome their ownweaknesses, the diversification strategy came into being, and this strategy has become animportant strategic choice of changing the business model, improving the enterpriseperformance and avoiding risks for agriculture listed company. However, scholars still haven’tan accurate definition for that the diversification is beneficial to improve the agricultural listedcompanies operating performance, or drop the performance of agricultural listed companies,in addition diversification strategy will be affected by other factors in the process of influenceenterprise operating performance, the problem deserve to focus on.Based on the above viewpoint, this paper combined with the related theory of home andabroad for diversification and performance of listed companies, selecting the annual reportdata of agricultural listed companies in2007-2011, using the Herfindahl Index to method thedegree of diversification, the diversity index as the independent variables, and theperformance indicators as dependent variable, meanwhile the enterprise scale, age, subsidyrevenue as the control variables, using descriptive statistics and multivariate regressionmethod to study the relationship between diversification and the performance of agriculturallisted companies. First, we will expound the research literatures at home and abroad about thediversification and the performance of agricultural listed companies; Secondly, introducingthe useful theories in our study, such as the diversification’s theory, agricultural listedcompanies and its performance’s theory, we hope these theories can guide the research ofchapter3and chapter4; Again, through the analysis about the present situation of agriculturallisted companies performance and diversification, it is concluded that the purpose of this paper to study the relationship between diversity and agriculture listed company performance;Finally, using regression analysis method to verify this hypothesis and obtain this article’sresearch conclusion: diversification is not conducive to the improvement of agriculture listedcompany performance.Previous research conclusions only consider about the simple linear relationship betweendiversified and the performance of agriculture listed companies, and they didn’t consider theother factors also will affect the performance of agricultural listed companies. In the processof research, we found that under the guidance of large high earnings concept, agriculturallisted companies start to expand its scale largely, based on the opinion, this paper will use theenterprise scale and diversified business interactions constructively to study the influence ofthe performance of agricultural listed companies, the result found that the enterprise scale anddiversification degree of interaction the agricultural enterprise performance significantly, andthe bigger the scale of agricultural listed companies implement diversification, the smaller thenegative effect on the performance.