An Empirical Study Of Corporate Social Capital,Diversified Development&Firm Performance

Start-up enterprises always concentrate resources in certain field for taking a place in the market. Along with accumulation of resources firms normally cosider diversification to seek better development or break through the limitation. Diversification strategy always involves different departments or industries.Therefore, its success relies on the support of enterprise resources. Social capital is the actual or potential resources availably embedded in the relationship network. Thus, social capital shall influence the diversification and performance of enterprises.In this paper, we study the relationship between social capital, diversification strategy and firm performance, including the influence of social capital on diversification and the intermediary role of diversification in the relationship between social capital and firm performance. This study selected 2010-2014 financial information and entrepreneurs related information of listed Companies in China,having descriptive statistics and difference test and multivariate linear regression empirical research.The empirical results show that social capital has a significant positive impact on diversification and related diversification, social capital has a certain negative impact on the unrelated diversification. Social capital, respectively, from the organizational level and individual level, the former shows a significant positive impact on diversification as well as related or unrelated diversification, entrepreneurial social capital has no consistency rule,however. For the intermediary role, we find that social capital has a positive impact on firm performance and related diversification does not have the effect of mediation in the relationship between social capital and firm performance.What’s more, both diversification and unrelated diversification have significant mediating effect on the relationship between social capital and firm performance. At the same time, diversification as well as related or unrelated diversification all have a negative impact on firm performance.