An Empirical Research On The Relationship Between Diversification Strategy And Company’s Perfromance In Culture Industry

It witnessed a rapid growth in culture industry in recent years with a fast developing of comprehensive power of the country and increased life level of the people.Culture industry will be a dominant industry under the pressure of downside macro economy and instruction of the government’s Thirteenth Five Year Plan.A lot of policies have been adopted by the government to stimulate the development of this industry,while more and more commercial capital emerges into this industry as well.Culture industry achieved a rapid growth in industry size and growth rate in the past years.It has a positive impact to have an insight study for corporate governance within culture industry,which may help to indicate the relation between corporate governance and company’s performance under above mentioned background.Applying document study,theoretical analysis and empirical analysis study,this paper studies the relationship of diversification operation and company’s performance among listing companies in culture industry.First,I searched related studies and documents of diversification strategy and company’s performance from local and overseas so as to lay a solid foundation for further analysis.Then,I designed the method of this study and selected the objectives and samples on the basis of the insight and understanding of culture industry.I did descriptive statistics analysis,correlation analysis and regression analysis regarding to the relation between diversification strategy and company’s performance based on listing companies’ data from 2011 to 2015 collected from GTA and Oriental Wealth database.Finally,it came out the conclusion.The study indicates following findings.1)Diversification strategy has a positive relation with company’s performance within culture industry without consideration of endogenous impact.2)Company’s existing characters imposed significant impact on the extent of diversification.3)It shows a stronger positive relation between diversification strategy and company’s performance with consideration of endogenous impact.This paper also pointed out that diversification strategy is just one of the approaches to improve company’s performance instead of the fundamental part.A company still needs to improve its mechanism of corporate governance and select appropriate business model to improve its performance and maximize shareholders’ rights.There are some studies on the topic of relation between diversification strategy and company’s performance in China,but little of them has a focus on a detailed industry,such as culture industry.This paper’s study reveals a positive relationship between diversification strategy and company’s performance.I hope this result may not only make up the blank of the related study,but also help to provide some enlightenment for the culture industry under China’s New Normal.