Abstract
Based on the theory of principal-agent theory, this paper makes an empirical study on the process of influencing the performance of enterprises by using the analysis method of “power-decision-performance” analysis, using hierarchical regression and group regression analysis to analyze the diversification strategy of entrepreneurial enterprises analysis. The results show that the ownership concentration of entrepreneurial enterprises has a positive impact on the financial performance of entrepreneurial enterprises and has a negative impact on the market performance of entrepreneurial enterprises. The increase of ownership concentration will inhibit the diversified development tendency of entrepreneurial enterprises, and the related diversification strategy which has a positive effect on the financial performance and market performance of the enterprise. The related diversification strategy has some mediating effect in the process of the impact of ownership concentration on the performance of the firm, and the negative report of the media has a negative adjustment in this process.
Highlights
Entrepreneurial enterprises usually lack of resources and business experience, and they have lower organizational identification and limited influence, lack of wide and steady external network connections, sound internal organization system and the reputation and legality owned by mature enterprises; their growth and development are restricted in various aspects (Haeussler,2012; Park and Steensma,2012)
The promotion of ownership concentration can improve the financial performance of the enterprise in the short term, but it will damage the market performance in the long run
The improvement of ownership concentration can inhibit the development of the related diversification strategy of entrepreneurial enterprises
Summary
Entrepreneurial enterprises usually lack of resources and business experience, and they have lower organizational identification and limited influence, lack of wide and steady external network connections, sound internal organization system and the reputation and legality owned by mature enterprises; their growth and development are restricted in various aspects (Haeussler,2012; Park and Steensma,2012). Ownership concentration degree can effectively reflect the decision-making power difference between the founder and the company management during the strategic decisions making process. Domestic and foreign scholars have made a lot of studies on effect of ownership concentration on enterprises’ performances These researches mainly focus on the behavior modes of the enterprise owners and managers in different equity allocation modes. The decision-making statuses of entrepreneurs with different backgrounds in the company’s decision-making process will decide the company’s strategic choice of direction, different strategic choices will make corresponding influence on the company’s performance (Chen and Ho, 2000) These studies to some extent reflect the relationship between ownership concentration and corporate performance. They failed to describe the whole process of enterprises’ decision-making
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