Research On The Effect And Function Of Skyworth Group’s Spin-off

With the rapid development of economy,many high-quality large enterprises have emerged in the market of China.Diversification has become the strategic goal of many large enterprises under the motivation of business risks diversification.However,in recent years,some diversified comprehensive listed enterprises have shown their shortcomings such as tight capital and low management efficiency,resulting in the phenomenon of "conglomerate discount".In order to break through the obstacles brought by diversified operation,some comprehensive enterprises choose to spin off their business sections and go public independently.Based on the such background,the core issue of this paper is:How will the spin-off behavior affect the business effect of diversified enterprises?Different from previous research regarding spin-ofF behavior as independent events,this article will pay attention to relevant measures on the basis of spin-ofiF and analyze in the dynamic perspective.The aim of this paper is to find the reason of spin-off’s effect from the perspective of financing effect,management effect and governance effect.The research idea of this paper is as follows.Firstly,review the literature and theoretical basis related to spin-off.Secondly,introduce the background and spin-off process in the case of Skyworth group.Then,in the part of case analysis,the strategic purpose of Skyworth Group’s spin-off is analyzed based on the industrial life cycle theory and the development background of home appliance industry.After that,evaluation is made on the operating effect of Skyworth group after its spin-off.Finally,find the reason of spin-off’s effect from the perspective of financing effect,management effect and governance effect.The conclusion of this paper is as follows.Firstly,diversified enterprises can effectively promote the business structure adjustment plan by spin-off some businesses,so as to accelerate the transfornation of enterprises.Secondly,by separating and listing high-quality businesses,the group company can strengthen its independent financing capacity and effectively alleviate the financing constraints of both parent and subsidiary companies.Thirdly,the spin-off promotes the implementation of specialized management,which is conducive to strengthening the core competitiveness of both parent and subsidiary companies.Fourthly,spin-off can help to reduce the degree of information asymmetry of the subsidiary,optimize its incentive mechanism and supervision mechanism,and effectively alleviates the agency problem in diversified enterprises.The innovation points of this paper are as follows.Firstly,while studying the effect of spin-off,it shows the influence mechanism that spin-ofif behavior affects the enterprise’s operation effect in the aspects of financing,operation and governance.Secondly,this paper takes relevant measures on the basis of spin-off into consideration,and forms the analysis on the whole process of resource integration in the case.