Research On The Relationship Between Equity Concentration,Diversification Strategy And Corporate Performance Of Large Private Listed Enterprises

With the changing economic situation and the implementation of relevant preferential policies and measures,private enterprises have ushered in unprecedented development opportunities,but there are still many unavoidable challenges.Nowadays,the development of enterprises is facing more and more competitors.The fierce market makes many types of enterprises face bankruptcy.A correct and timely strategy is particularly important for the development of enterprises,which may bring them back to life or make them worse.For large private listed companies,the strength is relatively strong,but now with the recycling of resources and the improvement of environmental awareness,the cost of private enterprises has increased.The arrival of the "Lewis" turning point has gradually disappeared China’s demographic dividend,making it difficult for them to maximize their benefits through cost control.The Fifth Plenary Session of the 19 th CPC Central Committee emphasized the transformation and upgrading of enterprises and encouraged the development of strategic emerging industries.Due to the various pressures faced by enterprises,they will soon be eliminated by the market without change.From the perspective of strategy,diversification strategy can reasonably allocate resources,reduce redundant resources and reduce costs.At the same time,entering relevant fields or different industries is conducive to enterprises to increase innovation investment,provide new products and explore new markets.Therefore,through diversification motivation theory,principal-agent theory and property right theory,this paper studies the relationship between ownership concentration,diversification strategy and enterprise performance.Since 2020,China’s economy has been affected by the epidemic.Although there has been an obvious mitigation and recovery,and some enterprises have also returned to work and production,due to the characteristics of large number,small scale and short life cycle of private enterprises,it is difficult to recover and develop rapidly in a short time,so many small and medium-sized enterprises are unable to recover.Therefore,the author selects the data of 1597 large private listed companies in China’s A-share market from 2012 to 2019,obtains 7729 effective samples,and uses correlation and regression analysis methods to study the relationship between ownership concentration,diversification strategy and enterprise performance.It further verifies the representative industries with data,and shows that the empirical results are consistent with the conclusion except the primary industry.The research shows that ownership concentration can promote the improvement of enterprise performance,and the implementation of diversification strategy will hinder enterprise performance.The more concentrated the equity,the more cautious the implementation of diversification strategy.Diversification strategy will weaken the relationship between equity concentration and the performance of large private listed enterprises.