Research On Financial Risk And Control Of Diversified Operations Of Listed Companies In China's Auto Industry

As one of the important strategies of enterprise growth,diversification has been widely concerned for a long time.Whether diversification increases or disperses the financial risk of enterprises,there is no unanimous conclusion.As an important industry related to the national economy and the people’s livelihood,the automobile industry has also joined the ranks of diversification.Therefore,it is necessary to study the impact of diversification on the financial risk of the automotive industry.Firstly,introduces the research background and significance of this paper,and reviews the literatures of domestic and foreign listed companies diversified strategy influence on enterprise’s financial risk management and manager entrenchment behavior;Secondly,according to the China automobile listed company specific circumstances,the diversification of the sample firms status,types and financial risk are briefly introduced;On this basis,using the sample data of listed companies from 2011 to 2015,the empirical analysis of the relationship between diversification and corporate financial risk management and the moderating effect between the two by management of trench defense,results show that:(1)improving the degree of diversification can reduce the financial risk of the enterprise;(2)there are obvious behavior of automobile trench defense management of listed companies;(3)The management of trench defense would be a negative correlation between the significant weakening of listed automobile companies and the degree of diversification of enterprise financial risk,the higher the level of defense management entrenchment,diversification is easy to increase the financial risks of enterprise.Finally,according to the results of the empirical study,some suggestions for improvement are put forward,these have a certain theoretical and practical significance for the diversification of China’s automobile listed companies.