Diversification, Parental Control and Enterprise Performance: An empirical study of Chinese Distribution companies

Diversification, Parental Control and Enterprise Performance: An empirical study of Chinese Distribution companies

Diversification can help enterprises to achieve synergies so as to enhance business performance. This article attempts to study this question from the viewpoint of parental control. The interaction effects among corporate diversification and the parental control tested through data obtained by questionnaires to 87 Corporations. The study found: companies with diversification strategy adopting official control over their subsidiary will reduce the overall corporate performance. However, the interactive effects between the degree of parental control and diversification are not significant.