An Empirical Study On The Effect Of Diversification On The Information Technology Listed Firm Performance

Diversification is a strategic choice for firm expansion, and is an effective way to spread the risk in the process of business operations, to avoid excessive competition and improve firm performance.However, from the point of long-term firm practice and theory research, the influence of diversification on firm performance has not yet formed a consistent conclusion,so whether suitable for firm and how to effectively diversification has been always the focus of theory and industry. In recent years, the rapid development of information technology industry has been enhanced the position in the market economy. The information technology industry has high-intelligence, high-growth, high-risk, high-yield and other characteristics. So in order to spread risk, many listed firm of information technology industry have been implement the relevant or non-related diversification business model, through direct investments or mergers and acquisitions and other means. Therefore, under situation of different industry characteristics, the study on the influence of diversification on firm performance has important significance for the Chinese information technology industry of listed firm how to implement diversification strategy. So study on diversification influence on firm performance, under different situation of industry characteristics, the information technology listed firm how to implement diversification strategy has an important guiding significance.This article mainly adopts the literature analysis and mathematical statistics to research the influence of diversification on the performance of information technology listed firm.First of all, this article states research background and significance, and reviews the existing related literature. Secondly, summarize the relevant theories of diversification and firm performance, the meaning of diversification and firm performance, the diversification and firm performance indicators to measure method, and the cause of diversification theory. Then,in-depth analysis the current situation of the information technology listed firm’s diversification, as well as the existing problems, and lay a foundation for subsequent empirical research. Finally, the paper exerts the method of descriptive statistics and regression analysis, with annual report data of information technology listed firm from 2010 to 2014 as research samples, constructes the empirical research models, and analyses the influence of diversification on the influence of the information technology listed firm performance. The results show that: there is no significant correlation between diversification and firm financialperformance, and there is a significant inverse U-shaped relationship between diversification and firm market performance; Firm scale inhibits the diversification of information technology to the influence of listed firm performance, and debt paying ability and growth ability promote the diversification of information technology to listed firm performance effectively. Through the research conclusion, the information technology listed firm should improve the system of market supervision, promote the efficiency of the company’s internal management decision-making, and expand company size moderately. At the same time, on the premise of focusing on core business, information technology listed firm enter into other business areas through debt management way, thus ensuring steady and rapid ascension information technology listed firm performance.