The Effect Of Diversification On Comprehensive Performance And Volatility Of Securities Companies

With the rapid development of the national economy and the steady increase in the income level of residents,China's capital market has entered a rapid development stage since the 1990 s.Especially,China's capital market has made considerable progress and has become a major global capital since the 21 th century.As an important part of the capital market,securities companies have experienced a rapid increase in their number and scale in the past 30 years,and their performance has been on the rise as a whole.At the same time,the business of China's securities companies is increasingly diversified.In the 1990's,securities brokerage,securities underwriting,and securities self-operation were the main business operations,and asset management,private equity investment,margin financing and securities lending were added in recent years.On the whole,as innovation-type businesses are limited by many factors,the development of innovative business of securities companies is still in the initial stage,and traditional business revenue still occupies a large proportion.However,as domestic securities companies try to make transformation,the proportion of innovative business revenues is expected to increase.To carry out innovative business is an inevitable requirement to optimize the income structure and promote the transformation of business.So,whether business diversification can promote the performance of securities companies and what kind of impact will it make on the volatility of performance? This will be the focus of this article.The main content of this article can be divided into five parts.The first part introduces the concept of diversification,reviews the history of the development of innovative business by Chinese securities companies in recent years and analyzes current market conditions briefly.The second part reviews relevant literature on diversification and company performance.The third part expounds the theoretical basis of this paper,which leads to the hypothesis that needs to be verified;elaborates the analysis method of factor analysis and the basic principles to be followed.the fourth part,constructs the index system to reflect the comprehensive performance of the company from various aspects,according to The scores of factor analysis were used to measure the performance level becomes the explanatory variable;the Herfindahl index is used to reflect the diversification degree of the securities business become explanatory variable;refer to the previous literature that analyzed the influencing factors of corporate performance,according to previous research results,selecting factors that are rich in theory and being used more often as control variables to estimate model parameters;examining fluctuations in performance from vertical and horizontal fluctuations,and conducting empirical analysis;Section V,according to the front The empirical results combine with the current problems faced by securities companies in diversifying their businesses and offer some suggestions for their future operations.