Whether The International Diversification Strategy Of The Listed Company Will Increase The Unsystematic Risk Of The Stock

The international diversification strategy has become the choice of more and more listed companies in China since 2013.The international diversification strategy can help the listed company for dispersing enterprise investment and reducing risk in operation.However,an effective implementation of international diversification strategy needs large amount of funds and a fully integration.The characteristics of different listed companies may become significant factors for the international diversification strategy affecting the unsystematic risk.By using the data of listed companies in both from 2011 to 2016 as example,this paper empirically examines whether the international diversification strategy will affect their stocks' unsystematic risk in the stock market.And further empirical tests show that different property rights and ownership structure will affect the outcome of international diversification strategy on stock unsystematic risk.In the view of reducing unsystematic risk,non-state-owned enterprises and enterprises with high concentration of equity can achieve greater success with the adoption of international diversification strategy.The main contribution of this paper is to expand the domestic research on the international diversification and unsystematic risk,analyzing the different results of international diversification strategy on the stock of unsystematic risk because of different nature of property rights,ownership structure when the listed companies adopt it,which provides a reference for investors and managers of listed companies.