The Relationship Between Diversification And Performance Of Real Estate Listed Companies In China Empirical Study

Since the study of the relationship between diversification and performance is first proposed by Chandler the first time.Scholars at home and abroad have carried out a lot of researches on this relationship,but there are few researches on the relationship between diversification of real estate companies and corporate performance.The real estate industry is one of the important driving forces of our country's economic development,which is closely related to the people's life.In recent years,due to overheated investment,the real estate has changed from the rapid growth of the golden age to the steady development of the silver age,with the increase of land and capital cost of a second tier city,the housing price is rising too fast,the development of the three or four line city industry can not keep up with the urban construction,which leads to the excess supply of commodity housing.Under this context,the real estate enterprises should actively seek transformation and upgrading,diversification can be used as a strategic choice for housing enterprises at this stage,However,the diversification of the real estate company's performance needs to be further studied.To this end,this paper makes a thorough and systematic study on it in order to provide a reference for the diversification strategy selection of Real Estate Company.This paper puts forward the theoretical hypothesis of diversified operation on the performance of real estate listed companies,and divides diversification into specialization,vertical diversification and horizontal diversification based on the theoretical analysis of the relationship between diversification and corporate performance.Taking the sample of 95 real estate listed companies in 2011-2016 years,the present situation of the diversification and performance of the listed real estate companies is analyzed in detail by using the descriptive statistics method.,meanwhile,established the panel regression model for the empirical test of the theoretical relationship between diversification and performance.The study found that diversification and real estate company performance significantly negative correlation,the lower the degree of diversification,the better the performance of the company is better.;vertical diversification and corporate performance is also significantly negative correlation,that is,the lower the degree of vertical diversification of the company's performance is also significantly better;While the horizontal diversification and corporate performance showed a significant inverted U-shaped relationship,that is,with the degree of horizontal diversification,corporate performance significantly increased,when a certain turning point(degree of0.444),the horizontal diversification degree to further improve the corporate performance significantly reduced.Finally it puts forward that the choice of vertical diversification of enterprises should be appropriate to reduce the degree of diversification and the choice of horizontal diversification should be adjusted to 0.444 in the diversification of diversified business strategy to improve the rationalization of corporate performance recommendations.