Empirical Study On Relationship Between Diversification Of Small And Medium-Sized Boards Of Listed Companies And Financial Performance, Growth In China

Since the emergence of diversification theory, many scholars have conducted a large number of empirical studies on relations between diversification and performance, but it still has no unified conclusion. It also indicates that it remains uncertain whether the diversification of enterprises to create value. But in the actual business, enterprises always conduct diversification development strategies when it develops to a certain stage. Therefore, Research on the relationship between diversification and operating performance has great practical significance. A small and medium-sized enterprise as an important force plays an important role in the development of the national economy. How to achieve faster and better growth of SMEs has become the focus of attention of the operator of SMEs. Previous studies showed that the growth of SMEs through four channels, namely a single business type, business-led type, related diversification and unrelated diversification.This article focuses on SME board listed companies as research object, and divides performance into financial performance and growth, in order to find the relationship between diversification and financial performance, growth for providing theoretical guidance for the implementation of diversification. Firstly, the paper makes the relevant research literature reviewed, and defines the relevant concept, and make the theoretical analysis of for the small board listed company diversified its financial performance and growth. On this basis, this paper analyzes the relationship between the degree of diversification and financial performance by the correlation analysis and return analysis, and analyzes the relationship between the type of diversification and financial performance, growth by comparison of the mean and single-factor analysis of variance.Through empirical analysis, the main conclusions of this paper are followed(1). the degree of diversification of small plates listed companies was positively correlated with financial performance;(2) the degree of diversification of small plates listed companies was positively correlated with growth;(3) relevant diversification of small plates listed company’s financial performance and growth better than unrelated diversification of the company;(4) a single business operation small plates listed company’s financial performance and growth superior to the leading business type Company;(5) in a different environment for economic development, professional management and diversification of the relationship between financial performance and growth is uncertain.Therefore, in order to be able to achieve sustained development, this paper suggests that small and medium-sized companies firstly should choose specialized-business. When small and medium-sized companies have been fully developed, and occupy a dominant position in the industry and in the capital, market, technology, they could choose diversification strategy, but diversification strategy should be based on core business and core competence.