The Empirical Research On Diversified Business And Financial Performance Of Chinese Construction Industry Listed Companies

In nineteen fifties，a strategic management expert of the United States calledAnsoff put forward the concept of enterprise diversification.Since then，diversification are gradually used by many developed countries，it was reference toeffective means to expand the scale of the enterprise,to improve the efficiency ofcapital use，to avoid risk and to increase profits. Diversification has mainly taken themanagement model of developping new products，merge with other companies，recombine Internal structure of products.However，the effect which enterprise diversification produced has always beenthe hot topic in scholars from all walks of life，and it is a highly controversial topic.What kind of relationship between diversification and financial performance there are，which is no consensus between scholars from all walks of life，and there are differentconclusions between different industries.This thesis choose listed companies of construction industry which as a pillarindustry of national economy as the research object. I choose the finance data in2011to2013of construction industry listed companies from the Shanghai Stock Exchangeand the Shenzhen Stock Exchange as the study sample，to explore the relationshipbetween diversification and corporate financial performance. It mainly includes twoparts，the first part is to discusse the relationship between the degree of diversificationand corporate financial performance; The second part is to explore the difference offinancial performance in different types of diversification. In this thesis，entropyindex is chosen as the measure of the degree of diversification，Return onAssets,Earnings Per Share,Asset-liability Ratio and Quick Ratio are selected to be theevaluation of financial performance from two aspects: the profit ability and the debtpaying ability. And I choose the size of the enterprise，the first shareholder’sshareholding and corporate growth ability as the indicators of controlled variables. Inthis thesis， in the premise of considering control variables， throughconstructing multivariate linear regression model between the diversification and thefinancial performance carries out the empirical study，and I can get the conclusion that there is the negative relationship between financial performance and the degreeof diversification. Through the descriptive analysis and regression analysis offinancial performance under different diversification type，I get the conclusion thatthe financial performance of enterprises with related diversification company ishigher than the enterprises with non related diversification.In this thesis,the empirical analysis of the construction industry listingcorporation lead to the construction:In China and in the construction industry listingenterprise，diversification does not necessarily bring with good economic benefit，It has the potential to reduce financial performance.