Research On The Corporate Diversification's Impaction To Enterprise Value In Chinese Agricultural Listed Companies

As a bond of capital markets and the promotion agriculture industries, the agriculture listed companies plays an important role in accelerating the industrialization of agriculture, and developing modern agriculture. These companies are undertaking the heavy responsibility of developing agriculture industries, while enjoying all kinds of favorable policies. However, as a result of the agricultural profession fragility in the nature, most of agriculture listed companies are falling to manage exhausted and nearly can't self-sufficient. Along with this, the serious phenomenon of "non-agricultural management" appears.This thesis takes 51 companies which listed in agricultural board of Shenzhen and Shanghai Stock Exchange House as the research objects and does qualitative and quantitative analysis on its present situation that diversified operation in strategy. The research discovered that more than half numbers of agricultural listed companies adopt strategy of diversified operation which spans 2 to 3 professions, and about 67% companies carry on diversified operation in strategy which is not contact with agriculture. The article believed that, the reason that agricultural listed companies adopt diversified operation in strategy is to disperse management risks which are unique in agriculture profession and pursue enterprise value maximization. All of these operating problems that agriculture listed companies has exposed, in fact, are the reflections of the agriculture in the stock market as a friability profession which is encountering many frustration. It is also due to the stock market's pulling force and the company short-term management pressure. All these factors gradually pressing the agriculture listed companies depart from the agricultural industry.To find whether the diversified operation truly enables agricultural listed companies obtain more enterprises value premium, the article has carried on the regression analysis in the extent and the modes of diversified operation. The research discovered that, the diversified operation caused agricultural listed companies in the whole obtain the diversified operation premium, but the relationship between diversified operation degree and the enterprise value presented " turned-over U" which is the non-linear relations. Also, with the correlative diversified operation, the agriculture listed companies' enterprise value presents the correlation dependence, but with the non- correlation diversified operation, it appears the negative correlation. So, we can get the moderate diversified operation surpasses excessively and the sole diversified operation, the correlation diversified operation surpasses the non- correlation diversified operation. In addition, to a certain extent, supplementary study also found that in the agricultural listed companies operating risks can be decentralized by diversification.Based on the above analysis, for the problems in agricultural listed companies which has been diversifying, following suggestions have been put forward in the article: First of all, develop dominical business of the agricultural listed companies, and foster core competitiveness; secondly, based on the core competitiveness, develop the diversify of agriculture-related business; another, control the negative effects of diversified operation; Finally, establish and improve the supervision system of agricultural listed companies.