The Path Analysis of Diversification Strategy and Capital Structure in the Listed Companies

Corporation diversification strategy is a trend. Will the past and existing diversification strategy choice affect the company´s now and future decision? Moreover will the past and existing capital structure also affect the company´s now and future strategic choice? This paper tests the causality of diversification strategy and capital structure by four structure equation models and AMOS6.0 software. The results reveal there is a significant causal relationship among capital structures and among company strategies. There exists a interaction between capital structure and company strategy.