A Study On Traits Of Financial Industries' Diversification And The Relationship With Performance In China

Diversification is an enterprise's strategic decision, domestic and international research about the diversification'influence to the enterprise has developed to a quite mature stage. They had obtained some very important theoretic and practical achievement, and established some quite perfect research technique and the train of thought. But as the special enterprise of finance, only a few research were about the financial diversification. By reviewing the recent documents and general principles, we can find that there are different opinions on the strategy of financial industries'diversification. As we know, the financial crisis since 2007 has brought us more thinking on diversification. The study on traits of financial industries'diversification and performance turns to be meaningful.This paper takes theory analysis and empirical analysis together, then puts the diversification index of general corporations into financial corporation, to weight the financial diversification performance. I select twelve Chinese commercial banks and three insurance companies as the research samples, and do Linear Regression and Factor Analysis on the panel-data, then give my opinion on how to advance China's financial industries'diversification performance.It has mainly carried out four aspects of research. Firstly, based on knowledge and the theoretical perspective, I introduce the traits of diversification management and the influence on performance. Secondly, with the diversification index,RI,D/A etc, I conduct empirical analysis on the correlation between financial industries'diversification and performance by Linear Regression. Thirdly, I analysis to conclude the factors which influence the diversification performance by Factor Analysis.Finally, based on the empirical analysis results, I have written some advices to China's financial industries'diversification to enhance finance performance. As far as the above research, the main conclusions are follows: Firstly, the three insurance companies can not get benefits of diversification management. Secondly, the four state-owned commercial banks'effect of the diversification is positive. Thirdly, the other twelve non-state-owned commercial banks'effect of the diversification is negative. Fourthly, the interest has none significant results with commercial banks'performance. Finally, the profit development factor is the most important one to commercial banks'performance.