Financial Slack,Diversification And Performance:Evidence From China's Publicly-traded Forestry Corporations

Diversification is an important way for listed forestry companies to realize their transformation.The deepening reform of state-owned forest farms and state-owned forest areas has promoted the transformation and upgrading of forestry industry.With the gradual implementation of natural forest protection project from pilot project to expansion stage by stage,great changes have taken place in the mode of production and management in forest areas.The traditional mode of forest management has been terminated and forestry logging has been stopped.It requires the forestry industry to change its development mode,cultivate its economic advantages,realize transformation and upgrading,and diversify its management.With the formation of forestry industry layout,the industrial structure is also optimizing.However,there are still some problems in forestry industry,such as large but not strong,weak resource base and weak industrial foundation support.In the process of forestry industry development,there is still an unbalanced situation,and the level of performance is uneven.How to improve the overall performance through upgrading and transformation has become an important issue of forestry industry.The main findings of this paper are as follows:Restorable redundancy has a significant relationship with performance,while available redundancy and potential redundancy have no significant linear or U(inverted U)curve relationship with performance.Market-oriented environment,political connection and ownership nature affect the relationship between financial redundancy and diversification to varying degrees.The accumulation and utilization of resources play an important role in achieving performance goals,and different types of financial redundancy resources have different effects on performance.The relationship between diversification and performance is different under different performance quantile levels,and low-level performance is more vulnerable to diversification.Diversification plays an intermediary role in the relationship between financial redundancy and performance,which is manifested in the fact that recoverable redundancy affects comprehensive performance through diversification and has a direct impact on comprehensive performance.The enlightenment and reference significance of this paper are as follows:Financial redundancy has dual functions.From the risk decision-making point of view,the dual role of financial redundancy,the implementation of diversification strategy must have an appropriate level of financial resources,but a certain level of financial redundancy resources is only a necessary condition for diversification,rather than a sufficient condition,whether to implement diversification is also subject to the combined effect of internal and external factors.From the perspective of performance,the dual role of financial redundancy,appropriate level of redundancy will promote performance,excessive improvement or reduction of the level of redundancy will have an impact on performance and reduce the efficiency of operation.Be cautious about diversification.Relevant diversification is more conducive to promoting resource sharing between businesses,enhancing the synergy of resources,deepening core business and enhancing the competitiveness of core business.Comprehensive measurement of financial redundancy and diversification.Diversification mediates the relationship between financial redundancy and performance,and redundant resources can be redistributed and utilized in various business areas through diversification.