An Empirical Study On The Relationship Between Diversification And Economic Performance Of Listed Agricultural Companies

Agriculture is the basic industry of national economy, while listed agricultural companies are the representative of advanced productive forces in the developing process of agricultural industrialization, which have the important guiding significance on the future development of Chinese agricultural industry. In addition, the listed agricultural company also is an important plate in china security market. However, as Agricultural enterprises, listed agricultural companies have this industry's own weak quality inevitably. Nevertheless, all the listed agricultural companies have begun to carry out diversified strategy of operation with the goal to disperse risks of operation and search for the high-speed development. The problem is that whether diversified strategy of operation can improve the performance of listed agricultural companies and disperse risks of effectively at the same time. Based on this problem, this paper has analyzed the correlation between the performance and the diversified operation of listed agricultural companies.This paper based on related theories of the performance and the diversified operation about listed agricultural companies both at home and abroad, which has taken annual report data announced by 2001-2006 china listed agricultural companies as the sample, empirically analyzed different degrees of correlation between the performance and the diversified operation of listed agricultural companies with the methods of entropy and other related analytical means, which was on the foundation of measurement about the level of their diversified operation. Through the analysis, we found that there is a significant negative relation between the total degree of diversification and net asset yield. Meanwhile, total degree of diversification is direct interrelated with asset-liability ratio and negatively interrelated with quick -moving ratio representatively, but their relations are not significant. At the same time, there is not direct relation between enterprise performance and types of listed agricultural companies in correlated diversification and irrelevant diversification.Furthermore, based on these analyses, this paper divided all the types of diversifications into different categories by using the method of entropy and the rate of diversification. Meanwhile, With the Analysis of variance, we found that in the aspect of performance there have been gradually decreasing trend in the types of listed agricultural companies in single business, leading business, correlated diversification and irrelevant diversification among all the types of diversifications. Finally, this paper brings up relevant policy-related suggestions, combined with the empirical fruits and the practical circumstance.