earticle

영어

The cultural content business is lucrative and very sensitive to the changes of the era. In other words, the business tends to diversify due to its volatility. We have studied that the relations between the diversification and financial performance of the company. For this study, we define the meaning of the diversification and the cultural content company and varify previous studies. The79 cultural content companies' data come from the electronic disclosure system. In addition, we have applied to Berry-Herfindahl Index (BHI) that is the most commonly used index to understand the relationship between the profitability and diversification and the regression analysis has used. We assume that if the assets or the capital is big, it would be advantageous to the diversification. So we provide the groups that have 50 billion won in capital and 100 billion won in assets. In the result, we analyze the diversification and the financial performance show statistically U-shaped relationship. In other words, the financial performance of the larger cultural content company is inverse propotion to the diversification at some point. But after the point, the financial performance is propotion to the diversification. For the cultural content company, the diversification is essential to the steady profit. The aim of this study is to help the cultural content companies which chase the profit and stability by using the diversification.