Corporate Governance Characteristics Of The Impact Of Changes In The Degree Of Diversification

The diversification strategy of public companies has been of concern for domestic and foreign scholars. One of the important aspects is the influencing factor of the diversification degree. It is widely accepted that the corporate governance characteristics based on the agency theory influence the diversification strategy of public companies.Through reviewing the related literature home and broad, this thesis found that most of the current studies analyses the cross section data. That is to say, they study the impact of the current corporate governance characteristics to the current diversification degree. This thesis thinks that this studying way might ignore the time span from the diversification decision-making to its financial results. So this thesis explores the impact of corporate governance characteristics to the changes of diversification degree in next 3 years.This thesis selected 837 public companies listed in Shanghai and Shenzhen Stock Exchange as samples, took the corporate governance characteristics (including the nature of controlling shareholder, the ownership of controlling shareholder, managerial ownership and the duality of CEO and chairman of board) in 2004 as independent variables, applied OSL, Pearson correlate analyze and t test for equality means to analyze the impact of corporate governance characteristic to the change of diversification degree in next 3 years. It also took two typical companies as cases to verify the empirical studying conclusions.This thesis found that the nature of controlling shareholder can influence the diversification degree, the increase of diversification degree in the company with state-owned controlling shareholder is bigger, the shareholder which has the most controlling rights can influence the diversification degree. It also found that there is weaker negative impact between the duality of CEO and chairman of board and the diversification degree. And it did not find there is significant impact of managerial ownership to the change of diversification degree. This thesis thought that we should promote the scientificity of decision-making by improving the corporate governance and optimizing the ownership of public company to ensure the long term interests of company and the benefits of entire shareholders.