A Study On The Relationship Between Diversification And Performance Of Chinese Media Listed Companies

The relationship between diversification and performance has long been a controversial topic.Domestic and foreign scholars have done a lot of research on this issue，so far, there is still noconsistent conclusion.In recent years,with the promotion of relevant policies, the industrializationand marketization of China’s media industry is speeding up,and then there have been some medialisted companies.These companies are trying to implement the diversification strategy in differentdegrees. In order to find out the relationship between diversification and performance of currentChinese media listed companies, this article choose22listed media companies in Shanghai andShenzhen stock exchange as a sample.Using the data from2009to2012, we examined therelationship between diversification and performance. Hope that through the empirical research onspecial industry and small sample to reveal the particularity of this research,and give China’s mediaindustry some advice on how to enhance corporate performance through diversification.Firstly, the present situation of media listed companies’ diversity is simply classified. Basedon the analysis of the effect of media listed companies’ diversification which may have onperformance, this paper put forward hypothesis. Then, the author use correlation analysis,regression analysis and variance analysis to research the relationship between diversification andperformance of the media listed companies and to draw the following conclusions from theempirical perspective. First, whether it is business diversification or geographical diversification,no significant impact is found on the enterprise growth ability. Second, the relationship betweenprofitability of enterprise and the business diversification is negative correlation, but it’s notsignificant. Besides, there was a significant positive correlation between the geographicaldiversification and profitability. Third, business diversification and geographical diversification hasindirect impact on the profitability of the enterprise. They indirectly influence the profitability ofenterprise through the enterprise scale. Fourth, the interactive effect is found when testing the effectof business diversification and geographical diversification which have on profitability. Thenegative relationship between business diversification and profitability will be strengthened by thegeographical diversification and business diversification will weaken the positive relationshipbetween the geographical diversification and profitability. Fifth, among groups of businessdiversification and geographical diversification, the portfolio of low business diversification andhigh geographical diversity is the best. In addition, the correlation between profitability and asset size is negative. The relation between Profitability and corporate ownership concentration ispositively. Finally, according to the research conclusion, we put forward suggestions on thediversification of media companies.