A study on the factors influencing private enterprises' diversified mode selection

Recently, the development of the private enterprises attracts more and more concerns from all over the society, many private enterprises use diversification strategy to make enterprises bigger and stronger. This paper based on the Resources Based View and Transaction Cost Theory, from the aspects of micro, medium and macroscopic, analyze the diversified behavior of shenzhen and shanghai exchanges listed companies' data from 2004 to 2009. The results show that the more inner finance resource they have, the higher probability of merger they may choose; the more external finance resource companies have, the higher probability they will choose newly built mode; political relevance significantly influence the options of enterprise's merger pattern. This result provides important reference to private enterprise diversification of China.