Translated Abstract
The optimal market performance can be automatically induced by complete market competition under the complete competition’s market conditions. It is a very pity that this situation almost is very difficult to be achieved. The only use of this situation can be a basic frame of reference in theory economic researches.The industrial market performance depended on the industrial market factors and non- market factors in the incomplete market.How to ascertain, to distinguish and to measure those factors and discussing those factors’ effects on the industrial market performance will be very important according to the realist industries’ incomplete competition characteristic.The western industrial organization research puts their efforts on the industrial market performance in the incomplete market. They think the market barriers to entry as an important determinant of market performance.Their researches always suppose that the market system is in presence and their researches focus on market barriers to entry’s exist, barriers to entry’s types and the relationships between the barriers to entry and market performance. Their researches’ conclusions have influenced their government’s industrial organization policies.The Chinese market process has indicated that the research on Chinese industrial performance from the angle of the industrial market characteristic---barriers to entry---will be a necessity.Although the domestic existed researches have established the base of the research on Chinese industrial market entry in industrial organization, there is a lacking in systematization. Moreover, these researches almost follow the path such as property right structure ---firm behavior--- property right structure reform.Therefore this paper will focus on the Chinese industrial performance from the angle of barriers to entry and discuss the correlative industrial organization policy’s choice from the above reasons. This paper’s content contains that firstly giving a survey about the research on barriers to entry, market performance and industrial organization policies, and making an evaluation on the past researches, discriminating among the concepts of barriers to entry and giving this paper’s research frame Secondly studying the relationships between the those three kinds of barriers to entry and market performance thirdly giving a positive research on this relationship with the Chinese manufactures dates by formatting a market entry model and a case study on Chinese Telecom industry lastly giving some advice on Chinese industrial organization policy’s choice according to our conclusions.This paper’s conclusions are that at first the market technologic barriers’ direct effect on market performance is: (1) enhancing the firm numbers in the industry (2) the product’s price will rise in the industry if the market demand’s growth speed is fixed (3) the industry’s profit rate will rise (4) increasing the market concentration and the firm’s market power because of the limiting on potential market entry and therefore it is easy to form the monopoly market structure and to decrease net social welfare. Secondly, the barriers caused by the behaviors of the enterprises have complicated effects on the market performance. The main reasons for this is that the efficiency of the barriers of the enterprises behaviors depends on a lot of complicated assumptions, such as the assumptions of the behaviors between the competing enterprises, the assumption of the mode of the competition between enterprises and the assumptions about information. Although there are a lot of researches on the barriers of the behaviors of enterprises can be referred theoretically, the practical interpretation of such theories toward the competition of the real market depends greatly on the assumptions. Third, the government barrier such as entry governance is one of the important parts of governance policy toward natural monopoly enterprises, the main aim of which is to limit over-competition by fixing the number of the enterprises in the industry. Hence, in order to maintain and enhance the performance of the market, the price governance toward natural monopoly enterprises has become a very important problem. The problem of the policy choices of Chinese enterprises lies in the competing industry and natural monopoly industry. As to the competing industry, the policy should include some technology entry. The specific standard of this depends on the technological feature of the industry and the international practice. The policy aimed to encourage R&D and anti-monopoly policies should be included as well. While as to the natural monopoly industry, the policy should focus on the following aspects: 1, the faction of the governance department of the government should be separated from that of the owner of the natural monopoly enterprises. 2, incentive governance should be adopted in the price governance. 3, an effective price governance institution should be set up. The innovations of the paper are as follows. First, the methodology innovation of the paper lies in that a structural research has been adopted when studying factors of the technological entry, that a non-cooperation game theory has been adopted when studying behavioral and government entry barrier, and that a cause and effect theory based on the price equilibrium theory and incorporated by the dynamic variables has been adopted when empirically studying the entry barrier and the market performance of the industry of manufacture. Second, the paper provides a new definition to the entry barrier from the aspect of the number of the enterprises. The advantage of this lies in that first, it solves the problem of the difference between the definition given by J.S. Bain and G.J. Stigler, the result of which shows that only under one condition can economy of scale be an entry barrier. AS the number of the enterprises rises, the two definitions have a lot in common. Our research is identical with the former but we also agree that most of the entry barrier should be defined by the definition of the latter. Second, when studying the enterprises, we find that the industry can be classified according to the number of the enterprises in the industry hence to be studies respectively. So in this paper the industry is classified into manufacturing industry which main a lot of enterprises and the natural monopoly industry. Third, a new classification is provided toward the entry barriers based on the analyses of the current ones, which enables the relation between the entry barriers and the market performance to be clearer and more logic. Forth, in the empirical analysis, a assessable linear function is set up about the entry and exit factors. In the function, the net entry rate is used to show the market performance, which efficiency gets rid of the disadvantage of using the rate of profit in the previous research. The problems to be further studies are that first, which index and standard can be adopted to define the scope and frontier of the market. Second, how to set up the constraints toward the current enterprises and the potential enterprises to further measure the relation of the behavioral barrier of the enterprises and the market performance. Third, as to the natural monopoly industry, how can we set up the index and the method of the government governance to describe the dynamic game process between the government governance and the current enterprises.
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