Economic Analysis Of Vertical Transaction Mode Choice

Along with high-speed development of Chinese social and economy, the electricity installed capacities have present from shortage to surplus; the electricity "unbalance" problem becomes more prominent. Specially, because that coal industry take a lead to market, it cause coal price soar, but the electricity enterprises are still placed under government regulation, these result the relationship between coal and electricity get nervous and even arrived at daggers drawn in the last years.Order coal conference already has not solved the helpless conflict between coal and electricity. At the time that coal price anticipate rise but electricity price get hard adjustment in short time, coal and electricity prices linkage again just be a transition measure, not a long plan for the future. How about coal and electricity vertical integration? Can this kind of "planned electricity" and "marketed coal" combination solve the puzzle which perplexes each other? Is signing long-term contract a good method which prevent from electricity industry shock of coal? How we look upon more and more the vertical integration phenomenon of coal and electricity? Is this blind and excessive vertical integration mode a recipe to solve the coal and electricity issues? Particularly, how can we judge that coal and electricity integration was excessive and why vertical integration is excessive? All problems deserve us to seriously consider and go deep into study.For this problem, see from the existing research literature, we can generalize the motive of vertical integration or desintegration as following aspects:Pursue scope economy or scale economy, intent to obtain strategy effect, economy come from transaction cost or organization cost and get keep on competitive advantage etc. But how to select an appropriate theory to explain Chinese coal and electricity vertical transaction relationship is an important issue. This work wishes to build a firm vertical transaction theory and used itt to explain the choice of Chinese coal and electricity vertical transaction patterns. In particular, this paper focused on in recent years coal and electricity industry exists the phenomenon of excessive vertical integration and why. We may make some interesting conclusions. Firstly, the vertical transaction theory lies in the trade-off between specialization economy and integration economy. Savings of the organization cost will produce specialization economy and saving of transaction cost will bring integration economy. The intersection of two cost curves determines the optimal form of vertical transaction mode choice. The major factor to affect economy of specialization is the efficiency of production technology and value of specific human capital; the main factor to affect the economic effect of integration is transaction method and system environment.Secondly, this paper puts forward that Chinese coal and electricity vertical transaction modes can be divided into property right type, contractual type and intervention type. The core of theory analysis lie in the trade-off between transaction cost, organization cost and policy cost. Therefore, coal and electricity vertical transactions look for balance between market, firm and government, but it needs to depend on the environment coal and electricity enterprises placed. We classified market failure and imperfect market. Under imperfect market circumstance, the intervention mode which was adopted transitionally and perhaps turns more valid than the radical means aim at complete market. But, along with market continuous perfect and exaltation of government interference cost, the basic method depends on market contract transaction little by little.Then, as vertical integration status of forty-eight Chinese coal and electricity listed companies for example, this paper use panel data model to analysis factors firm taken into account during vertical integration. The results show that transaction cost and organization cost make greater influence on coal and electricity firm vertical integration, production cost and strategic effect make less influence. It confirms that transaction cost and organization cost affect the choice of vertical integration, support and correct the vertical transaction theory.Next, this paper attempts to establish the discriminator benchmarks and discriminator indicators of excessive-integration. On this basis, by Chinese coal and electricity listed companies, cluster analysis were carried out in order to accurately determine the excessive integration phenomenon of coal and electricity industry appears and the common features of these firms, it provide the basis to explore the reasons for excessive-integration.Finally, for actual circumstance of Chinese coal and electricity industry, we discuss whether coal and electricity enterprises excessively vertical integration exists or not and why from the angle of transaction cost economy. The base standpoint is that over frequent of coal price policy caused over high of coal and electricity market transaction cost, over high of coal and electricity market transaction cost again cause excessiveness of coal and electricity vertical integration. On the one hand, strong policy intervention and law soft-constraint makes that coal and electricity contract transaction mode is not ideal, on the other hand, budget soft-constraint and coal and electricity state-owned enterprises investment impulse make that property right mode is favored. In addition, the lag and hesitation of economic system reform makes the choice of coal and electricity vertical mode often tend government intervention.The paper has eight chapters introduced; concrete chapter arrangement and key point are as follows:Chapter 1 is introduction which discussed the theoretical and realistic background of this literature research and the problem need resolved. Chapters 2 is literature review concerning theatrical research of the fim main vertical transaction theory including Neo-classical Economics, Industrial Organization Theory, New Institutional Economics, Firm Ability Theory…etc and take into an overview. Additionally we review the research on Chinese coal and electricity vertical relationship. In Chapter 3; we tried to build vertical transaction theory and put forward that vertical integration or desintegration be decided by the trade-off between transaction cost and organization cost. In chapter 4 we revised vertical transaction theory framework and make use of three squares named that firm, market and government balance model to explained Chinese coal and electricity vertical transaction mode choice evolution, and distinguished effect of Chinese coal and electricity vertical mode operate in the circumstance under imperfect market or market failure. In next chapter 5, as the Chinese coal and electric listed company from 2001 to 2006 for example, we use regression model to analyze factor which impact coal and electricity firm vertical integration. Study result demonstrates that transaction cost and organization cost make Chinese coal and electricity firm vertical integration biggest influence. In chapter 4, this paper attempts to establish the discriminator benchmarks and discriminator indicators of excessive-integration. On this basis, cluster analysis was carried. Chapter 7 inquired into coal and electricity vertical integration exist or not and why. We point out that over frequent of coal for electricity price policy caused over high of coal and electricity market transaction cost, over high of coal and electricity market transaction cost again cause excessiveness of coal and electricity vertical integration. Finally, chapter 8 is a conclusion. This chapter sums up research conclusion, advice and value.