Impact of Diversification on Enterprises Innovation

This paper selects 632 manufacturing listed companies in 2015 and divides them into four categories according to the Wrigley classification method. By analyzing the conduction path of diversification influence on technological innovation, this paper studies the influence of different diversification types on R&D investment, and explores the relationship between diversification and innovation capability. The empirical results showed that the innovation ability of the diversified enterprise is weaker than that of the specific one; the diversification of non-related diversification inhibits the company's technological innovation activities; the higher the degree of diversification, the lower the innovation ability of the enterprise. Thereby the study provided some suggestions and hope it’s beneficial for enterprises to further improve their R&D capability.