| Corporate governance influences enterprise's performance in terms of strategic management. Starting from this point, the paper studies the relativity among corporate governance, diversification strategy and enterprise's performance of listed transportation industry companies in our country.Adoption of business strategy plays a decisive role in enterprise's survival and development, while diversification is always a hot subject in the theoretic field and actual practice. So far, the problem of diversification has been discussed by the scholars from management and economics for nearly half a century. In actual practice, the practical findings are not wholly satisfactory. Some enterprises make a great stride grasping the market opportunity because of diversification management; while some plunge into critical crisis and even become bankrupt.Meanwhile, corporate governance is the focus in the theoretic field. It prescribes the basic framework and operational mechanism of the whole enterprise. As a result, enterprise strategic management is within the given platform and framework, govern the enterprise to lay down goals and to achieve them. Therefore, it is no doubt that corporate governance plays an important role in the enterprise strategy option and putting it into practice. The thesis paper takes listed transportation companies that are assumed as lifeline of national economy. Firstly, the relationship between diversification business strategy and enterprise's performance is examined. Then the paper puts the diversification and corporate governance into study, and makes an attempt to dig out the deeper causes of diversification management. The study of a series of problems concerned in the paper will contribute to the mechanism perfection of listed transportation companies and the adoption of business strategy.The paper can be divided to five parts and the main conception of each part is stated as followings:Part I is introduction. It introduces the studying background, motivation, intention, scope and framework. Since transportation is important in national economy but deserves little attention, I choose listed transportation company as studying object.Part II is literary review. It covers theoretic review of diversification strategy, review of corporate governance, review of empirical research of diversification and performance, and review of diversification study. Theoretic review of diversification strategy illustrates on the diversification's definition, classification and its costs and profits. In the review of corporate governance, firstly, I introduce corporate governance in general. It includes the origin of corporate governance, and the three theoretic bases of corporate governance, namely, Stewardship theory, Agency theory, and theory of property rights. Then I particularly introduce the theory I applied in the paper, that is Agency theory including the basic hypothesis of Agency theory, three typical agency relationships in modern corporate governance (shareholder and board, board and manager, and shareholders and supervisors board). It introduces agency cost and finally points out the manager's motivation of undertaking diversification management basing on Agency theory, and foreshadows the following studying hypothesis. In the review of empirical research of diversification and performance, I review the relative literature in and abroad, make an arrangement basing on negative correlativity, uncorrelativity and positive correlativity between diversification and enterprise performance, and then I get to the conclusion. Finally it is the corporate governance and diversification. Firstly, it introduces the functioning mechanism of corporate governance and corporate strategy in general and then analyzes the relationship between two aspects in corporate governance, namely, ownership structure and board characteristics and diversification.Part III is the Research Design. Firstly, a studying hypothesis is proposed basing on theoretical analysis. And then it follows the collection and procession of materials, choosing of variable and its definition. We put finance performance ROA and market performance Tobin's Q in consideration to measure enterprise's performance. It is more convincing. Whereas, the measuring indicators of diversification adopt Entropy Index and Herfindal Index. In the end, a multivariate regression model is established.Part IV is the empirical results and the analysis. In includes descriptive statistics, correlated analysis and regression analysis. The empirical results show that diversification degree in listed transportation company has negative correlation with enterprise's performance. In other words, diversification decreases enterprise's performance. Liquid-stock share has positive correlation with diversification degree; ownership concentration has negative correlation; and the board size has negative correlation. However, the relativity between other indicators that are chosen by us and diversification degree is not significant.Part V is conclusion and suggestions. According to my research, as for the present listed transportation companies, ownership governance is still the decisive factor which influences manager's motivation and strategy making. However, the efficiency of governance on board governance and manager incentive (such as managerial ownership, managerial compensation) is limited, and does not play the supposing role. Firstly, under the circumstances of lacking efficient investor protection mechanism in our country, state-owned share is not the most inefficient institutional arrangement. Especially for transportation, which is the key field in the national economy and the people's livelihood, the supervision and attention of state-arrangement limit the diversification management being harmful to the enterprise's values and promote the enterprise's development? Secondly, legal person ownership proportion has little to do with diversification degree. It shows that legal person ownership could not play its supervising role effectively in corporate governance, and points out that there exists certain agent problem on legal person ownership itself. Thirdly, liquid-stock share is closely related to diversification degree. It shows that under present marketing and legal system, decentralizing liquid-stock shareholder could not act positively in corporate governance. On the contrary, enhancement of liquid-stock proportion weakens the management and motivates of controlling shareholders, leads to the managers'taking advantage of the liquid-stock and becomes the financing means of practicing the diversification managing strategy. Fourthly, ownership concentration is negatively correlative to diversification degree. It shows that moderate ownership concentration structure is helpful to protect mass investors'equity under present circumstances. Fifthly, the board size is significantly negatively correlative to diversification degree. It shows that, with the enrichment of professional knowledge, managing skills and the restriction of manage layer, the enlargement of board size within certain limit comes to a good result in listed transportation companies. At the same time, other board characteristics do not closely correlate to diversification degree, which assumes that board, as a corporate governance mechanism, does not play its supposing role as a part in the whole thing. From these conclusions, we put forward many suggestions on transportation development, specifically, realization of lower degree relative diversification management basing on cultivating core competence; square look on state-owned stock; maintenance of moderate ownership concentration; realization of diversification system of investment subject, the government's"doing something"; perfection of board governance mechanism; perfection of the mechanism of disclosure in listed companies; and standardization of disclosure form and content of financial statement in enterprise's annual report. |
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