The Relationship Between Product Diversification And Geographical Diversification And Its Impact On Firm Performance

China as an emerging market country,the imbalance of regional economic development and diversification of consumer demand make more and more enterprises begin to implement product diversification and geographical diversification strategy to seize market opportunities and occupy new market space.However,how to effectively use the strategy to improve the performance of the enterprise,the key depends on how to clearly understand the relationship between product diversification and geographical diversification,as well as the rational allocation of enterprise resources between the two.Therefore,the correct analysis of the relationship between product diversification and geographical diversification and its impact on corporate performance will help enterprises to better implement the diversification strategy.This paper is based on the resource based theory and dynamic capability theory,constructs the relationship between product diversification and geographical diversification and its impact on enterprise performance analysis framework,with 1194 Chinese manufacturing listed companies as a sample,using three stages least squares method to test the influence of two kinds of diversification strategy and its impact on Enterprise Performance the.The results show that:although the enterprise will be faced with a variety of opportunities for expansion or diversification due to the impact of the scope of the economy,but the degree of use these opportunities in a specific period of time will be subject to short-term constraints,leading to the existence of negative correlation between product diversification and geographical diversification;positive effect between product diversification and corporate performance,the negative effect between geographic diversification and corporate performance;The interaction between product diversification and geographical diversification does not have a significant positive impact on enterprises.It can be seen that in the context of China's economic transition,there is a phenomenon of excessive diversification of enterprises,based on their own resources enterprises need to carefully choose the diversification strategy.