Research Of Effects Of Technological Diversification On Firm Performance

Along with the continuous renewal of scientific and technological knowledge as well as the rising complexity of products,technology diversification has increasingly become an important technology strategy of a company.As a result,the study concerning technological diversification has attracted great attention.Some research holds that technological relatedness is an important factor in the above study.If a firm's technology is highly related,it tends to exploit whin its core technology.Otherwise,it emphasizes on many different unralated technology fields.To some extent,technological relatedness determines technological diversification types,in turn,it affects firm performance.However,few documents test and analyze concretely the effect of technological relatedness on firm performance.This paper tries to distinguish two different types of technological diversification based on technological relatedness,and then examine these two technological diversification's impact on firm performance seperately.This article takes Chinese listed companies in medicine manufacturing industry as the research object,mainly analyzes three questions: First,examining the effects of technological diversification on firm performance;Second,dividing technological diversificationinto unrelated technological diversification and related technological diversification,based on the entropy index method,and then analyzing the influence of these two kinds of technology diversification on firm performance;Third,introducing technology stocks as the moderator variable and inspecting the adjustment effects of technology stock on the technology diversification and firm performance relationship.Specifically,this paper firstly combs research literatures on technological diversification and firm performance,then summarizes the performance and technological diversification current situation of pharmaceutical manufacturing listed companies.On this basis,this paper puts forward the research hypotheses.Furthermore,this article makes regression analysis to test hypotheses,using the data of 59 medicine manufacturing listed companies during the year from 2010 to 2014.The empirical results show that:First,Chinese medicine manufacturing listed companies' overall technological diversification has negative influence on firm performance.The types of technology diversification affect the influence.Unrelated technological diversification has a positive effect on firm performance,related technological diversification has a negative effect on corporate performance.Second,the technology stock plays a regulatory role in moderating technology diversification and enterprise performance relationship.The greater the technology stock,more obvious the promoting effect of unrelated technological diversification on firm performance.On the contrary,the greater the technology stock,the stronger the inhibiting effect of related technological diversification on firm performance.All in all,through distinguishing two types of technological diversification and introducing the regulating variable,this article not only inspects the effects of technology diversification on firm performance,but also puts forward the proposals for implementing the technological diversification strategy more effectively.To some extent,this paper provides a new perspective to analyze the technological diversification and firm performance relationship and enriches the study on technological diversification.