Research Article
The Linear and Nonlinear Relationship between Diversification, Redundant Resources and Company Performance: Based on the Fixed effect Model and Threshold Model
@INPROCEEDINGS{10.4108/eai.18-11-2022.2326927, author={Yiran Xu}, title={The Linear and Nonlinear Relationship between Diversification, Redundant Resources and Company Performance: Based on the Fixed effect Model and Threshold Model}, proceedings={Proceedings of the 4th International Conference on Economic Management and Model Engineering, ICEMME 2022, November 18-20, 2022, Nanjing, China}, publisher={EAI}, proceedings_a={ICEMME}, year={2023}, month={2}, keywords={diversification; redundant resources; company performance; fixed effect model; threshold model}, doi={10.4108/eai.18-11-2022.2326927} }- Yiran Xu
Year: 2023
The Linear and Nonlinear Relationship between Diversification, Redundant Resources and Company Performance: Based on the Fixed effect Model and Threshold Model
ICEMME
EAI
DOI: 10.4108/eai.18-11-2022.2326927
Abstract
China has entered the stage of constructing new normal economy, which provides a new strategy room for companies. In such a context, more companies begin to pay attention to their own market, and also regard diversification as an important chance to develop. Based on the empirical data of listed manufacturing companies in Shenzhen-Shanghai stock market from 2010 to 2019, this paper firstly used the balanced panel two-way fixed effect model to explore the linear influence between industry diversification and performance, making static analysis on the various types of redundant resources within the companies in the diversification and performance relationship of the regulatory role. Secondly regression model was applied to analyze the nonlinear relationship between diversification and company performance, using redundant resources as the threshold variable. Finally, the dynamical influence of redundant resources on the relationship between diversification and company performance has been discussed.