Research On The Impact Of Diversification On The Operational Performance Of SME Listed Companies

Diversification has become an important enterprise development strategy.The advantages of diversification are mainly reflected in the decentralization of risks,the scope effect and the scale effect.Of course,diversification also has disadvantages.Diversification will increase the management cost of enterprises.It also leads to the decentralization of core competitive advantages of enterprises,so enterprises should consider carefully when they adopt this mode of operation.As an important part of China's economy,small and medium-sized enterprises play an important role in promoting China's economic development.The sustainability and sound and rapid development of these enterprises have always been the focus of our attention.Whether the diversification of small and medium-sized enterprises is conducive to promoting business performance and promoting the healthy and sustainable development of small and medium-sized enterprises is of great importance to small and medium-sized enterprises.It is necessary to study this aspect.In this paper,SMEs listed on the SME board are taken as research samples,and relevant concepts are defined and theoretical mechanism is analyzed.The distribution and performance of diversified SMEs are studied and analyzed.The results show that the diversified operation of SMEs is not common and the performance of diversified enterprises is not universal.The situation is not optimistic.On this basis,125 diversified enterprises are selected as samples for empirical analysis.In addition,considering the different development modes and trajectories of different industries,the impact of diversification on different industries is also different.Therefore,the first three industries which account for a large proportion are further selected,and empirical comparative analysis is made from the perspective of different industries.Through further empirical analysis of the whole sample and sub-industries,the following relationships between diversification and business performance are obtained:(1)Diversified business mode has a negative correlation with SMEs' business performance;(2)Diversified business mode has a negative correlation with manufacturing and information technology industry's business performance;(3)Diversified business mode has a positive correlation with construction industry's business performance Relationship.According to the research,this paper argues that SMEs should not be eager to adopt diversified business methods as a whole,especially for manufacturing and information technology industries,construction industry can adopt diversified business modes appropriately.