The Relationship between Diversification and Firm Performance of Electronic Information Industry Listed Companies
|Keywords||Electronic information industry Diversification Firm performance Herfindahl index|
In the middle of 20th century, strategic master Ansoff first put forward the concept diversification, after that the research on diversification management and firm performance became one of the hot topics for scholars, there are three kinds of research conclusions: diversification cut-rate price, diversification at a premium and diversification has no relations with firm performance. Meanwhile, in the practical cases of business circles, there are many companies achieved great success because of diversification, for examples, Japanese company Nissan involves in many industries , such as minerals, automobiles, chemical engineering, fishery, electronics and agriculture, Korean company Samsung also involves in many industries, like business, insurance, electronics, foreign trade, architecture, textiles, chemical fiber, sugar refining and paper making. There are also failing companies like China’s Giant Corporation, which involves in real estate, health products and clothing industries, etc. Different from companies in western countries, diversification management didn’t grow vigorously until 90 decades. Compared with European and American companies’road from specialization to diversification and back to specialization, our country is in the great fervor from specialization to diversification, so the research on the problems of diversification management seems quite significant.So this paper takes electronic information industry as examples to study the relations between diversification management and firm performance. first, we conduct a simple review on domestic and overseas related literature, and define the concept of diversification in this article, summarize domestic and overseas researches between diversification management and firm performance and the agent of firm diversification management; then give the hypothesis of this paper combined the characteristic of electronic information industry, choose index of diversification and performance. We extract 93 sample companies to conduct statistic description, correlation analysis, regression analysis, draw the conclusion: Diversification and the index of profit and performance is irrelevant. ;and the asset-liability ratio relates little with leading business unit firm,however,for those firm with varied business unit, the asset-liability ratio and their diversified management is positively related. Leading business unit and their Tobin,Q is positively related too. the varied business unit and Tobin,Q is irrelevant.finally this paper gives suggestions and questions needing further study.