Diversification And Performance Of Different Ownership Enterprises

Textile industry is China's traditional competitive industries,is one of the main export industry of our country.The textile industry has always played an important role in China's national economy.From the 90 s of last century,Diversification of textile enterprises carry out a variety of attempts and exploration,including success also failed,a lot of twists and turns.Therefore,how to guide the textile listed companies through the diversification strategy to promote its growth and change the current plight,raises great concern of theoretical and practical implications.Based on the institutional environment of China and China's situation and characteristics,this paper tries to do an in-depth study on the diversification of textile listed companies,which is of great theoretical and practical significance to promote the development of China's listed textile companies.First,this paper reviews conclusions and theories of prior studies on the relationship between diversification,firm performance and firm's ownership identity,and puts forward hypotheses and empirical models.And then,62 textile listed companies are selected as a research sample for empirical analysis.In the empirical part,this paper studies the relationship between the degree of diversification in terms of two dimensions(business diversification and geographical diversification)and performance of the textile listed companies.This paper uses ROA as the measure of firms' performance,Herfindahl index method to calculate the degree of business diversification,and the proportion of foreign sales revenue to the total sales revenue to calculate the degree of geographical diversification.The relationship between the degree of diversification and the performance of textile listed companies,and the Moderating Effect of firms' owenrship identity are studied by means of descriptive statistics,correlation analysis and regression analysis.Through the theoretical analysis and empirical study,the findings show that the degree of diversification of business and the performance of textile listed companies are inverted U-shaped curve.When the degree of business diversification reaches 42.48%,the enterprise performance is at the highest point.When the degree of business diversification is higher than this value,business performance with the degree of business diversification and decline.The firms' s oweship identity has a positive effect on the relationship between business diversification and performance.Specifically,compared with the state-owned enterprises,the curve relationship between degree of business diversification and enterprise performance is more obvious.The degree of regional diversification has significant negative relation on enterprise performance,and the firms' s oweship identity has no effect on the negative relationship between regional diversification degree and firm performance.Finally,this paper also puts forward some proposals for the diversified development of textile listed companies.