Abstract:Based on the resources-based view and agency theory, this paper tests the relationship between diversification strategy and earnings persistence by making use of the data from 2011 to 2017 of China's A-share listed companies. It is found that corporate diversification significantly reduced earnings sustainability, and the higher the degree of diversification, the lower the persistence of earnings. Furthermore, this negative relationship is alleviated in enterprises with a high level of non-precipitating organizational redundancy, high market competitive position and high proportion of institutional investors. The conclusion provides a reference for companies to adjust their resources structure, strengthen market competitiveness, and deepen capital market participants' understanding of corporate earnings information.