Corporate Governance Quality Diversification Strategy and Corporate Performance

In this paper, the author introduces a corporate governance index, which is a comprehensive assessment of the situation of Chinese corporate governance of listed companies, to test the match relationship between the quality of corporate governance of listed companies and their diversification strategy. Moreover, we study their impact on corporate performance and whether present corporate governance quality can meet the need of diversified firms. The empirical results show that, even for the sample companies whose corporate governance are better, their governance situation is far from being able to meet the requirement of achieving the successful implementation of the diversification strategy. Only for dozens of the best ones, corporate governance is not the reason for loss of business performance as the diversification strategy is carried out.