Ownership Structure、Diversification And Corporate Performance

Diversification and firm performance have been hot issues of academic research at home and abroad since the diversification concept was first proposed, and the relationship between diversification and firm performance is alsc considerable differences. In recent years, most Western scholars believe that diversification will damage corporate performance, that is, there is the phenomenon of the "diversification discount". At the same time, scholars further research the impact of the equity structure to diversification and corporate performance. The majority of studies have concluded that there is a certain impact of ownership structure on corporate diversification strategy and performance.China is an emerging market economy country. Imperfect laws, regulations and corporate governance structure have made China’s shareholding structure, diversified business strategy background and business performance may be different with the Western developed countries. To explore the relationship between diversification and corporate performance, this paper selects the Shanghai A-share listed companies’2178samples as observations between2008and2011. Based on the empirical results, we further explored the agency problem between the managers and shareholders, the controlling shareholders and little shareholders.The results show that:(1) diversification will damage the performance of the enterprise.(2) Whether or not the state-owned holding companies have no significant impact on diversification and performance.(3)The relationship between managerial ownership and corporate diversification and corporate performance is not significant. Agency problem is not significant.(4) Controlling shareholders showed a significant positive correlation with diversification and corporate performance. At last, the mediating effect showed that controlling shareholder will impact on performance by diversification.