Ownership Structure,Diversification And Corporate Performance

At present,the relationship between structure,strategy and performance has become one important research topic in business management field,but the research on this subject is relatively few.There is no quite consistent and explanatory conclusion,and there is no general consensus on the understanding of the important relationships and the important theorem in this field.Therefore,this research takes A-share listed companies located in Jiangsu,Zhejiang and Shanghai as research samples to explore the relationship between ownership structure,diversification and corporate performance.The purpose is to explore the relationship between diversification and corporate performance,the relationship between ownership structure and corporate performance,the relationship between ownership structure and diversification,and whether diversification has a partial mediating effect between ownership structure and corporate performance.Firstly,this paper reviews the research literature on ownership structure,diversification and corporate performance.Then,according to the theoretical and practical background,the research model and research hypothesis are constructed.Then,from the perspective of principal-agent theory,the ownership structure is mainly divided into two dimensions: management shareholding ratio and shareholding ratio of controlling shareholders.The dummy variables of diversification and Herfindahl index were taken as proxy variables of diversification.Return on assets and earnings per share are taken as proxy variables of corporate performance to explore the relationship between ownership structure,diversification and corporate performance.Moreover,this research collects and sorts out the related data of diversification of listed companies in Jiangsu,Zhejiang and Shanghai.Finally,STATA software is used for statistical analysis of the collected data,in order to verify the proposed hypothesis and the constructed model.The results show that:(1)diversification will damage corporate performance,that is,diversification is negatively correlated with corporate performance.(2)There is a positive correlation between management shareholding ratio and corporate performance;There is a positive correlation between the shareholding ratio of controlling shareholders and corporate performance.There is a negative correlation between state-owned shareholding and corporate performance.(3)The shareholding ratio of management is negatively correlated with the degree of diversification;The shareholding ratio of controlling shareholders is negatively correlated with the degree of diversification;The state shareholding positively correlated with the degree of diversification;(4)Diversification has a mediating effect on the relationship between management shareholding ratio and corporate performance,the relationship between controlling shareholder shareholding ratio and corporate performance and the relationship between state-owned shareholding and corporate performance.On this basis,it is concluded that the two kinds of agency problems between managers and shareholders,and between controlling shareholders and minority shareholders in listed companies in Jiangsu,Zhejiang and Shanghai are one of the reasons for enterprises to implement diversification business strategy.Therefore,two kinds of agency conflicts should be properly handled.Based on the research conclusions of this paper,we propose some management implications for enterprise managers: Firstly,we should optimize the ownership structure,appropriately increase the shareholding ratio of management and controlling shareholders,reduce the agency costs caused by the two principal-agent problems,and improve enterprise performance.Secondly,we should pay more attention to the main business,prudently implement the diversification strategy,and carefully choose the type of diversification strategy,so as to avoid the trap of blind expansion.Thirdly,we should attach importance to the mediating role of diversification in the relationship between ownership structure and corporate performance.We should make the most favorable decisions by comprehensively applying corporate governance approaches according to the actual situation and the opinions of various parties.Finally,the author points out the limitations and shortcomings of this research,as well as possible research directions for further improvement.