The Research On China Transitional Institution Environment, The Relationship Between Vertical Integration Enterprises’ Control And Integration Performance

Since the financial crisis in2008,the vertical transaction for the integration of the up anddownstream production factors was obviously active, many advantaged enterprises see theopportunities of expansion and "bigger and stronger",new round of vertical integrationwave come in reality. Vertical integration as an important corporate growth strategy, theintegration effect greatly affect the future competitiveness and performance, and furthervitally determine the enterprise’s future survival and development of some Chinese enterpriseswho implement a vertical integration strategy, through the extension of industrial chainrealized scale, scope economies, but because they neglect the integrated regulatory controland refinement of management, result in impacting the effect of vertical integration andintegration goals’ achievement, nor did it effectively enhance the competitiveness of the mainindustry. Especially in the context of the China transition, the rapid economic and politicalchange, the lack of institutional factors, unclearly defined property rights, property protectionregime arrangements lacking of stability caused the uncertainty for the vertical integrationof control behavior,which bring a high degree of system risk;on the other hand, the effect ofvertical integration is affected by regional development imbalance in China institutionEnvironment, vertical transaction characteristics and a number of other actors.Based oninstitutional theory, organizational theory and transaction cost theory, in the context of Chinatransition scenarios, analyze he relationship between the institutional environment uncertaintyand control of vertical integrated enterprises and the relationship between the verticalintegrated control and integration performance, the paper mainly explore the following issues1.In the context of the transition economy, how about the relationship between theinstitutional environment uncertainty and vertical integrated enterprises control?2.whether the relationship between the institutional environment Uncertainty and thecontrol of vertical integrated enterprise is influenced by enterprise capabilities, if there is, howthe mechanism of action?3.How is the relationship between the control of vertical integrated enterprises andintegration performance?4.Whether the relationship between the control of vertical integrated enterprises andintegration performance is influenced by the institutional distance as well as the impact ofthe transaction inter partner dependency, if there is, how the mechanism of action?On the basis of the literature, this paper, build theoretical framework and conceptualmodel of the institutional environment, vertical integrated enterprises control, integration performance,propose research hypothesis, using the survey method, as the sample data of132vertically integrated enterprises in China, empirical test of theoretical models and researchhypotheses, using multiple regression analysis and other statistical analysis method, draw thefollowing conclusions：（1）The institutional environmental uncertainty has a positive correlation with thedegree of vertical integrated enterprises’ strategic control, the degree of financial control, thedegree of cultural control（2）When the enterprises’ capability are different, in the face of an uncertaininstitutional environment, vertical integrated enterprises’ degree of each control is different.（3）the degree of strategic control, the degree of financial control, the degree of culturalcontrol has a positive correlation with the vertical integration performance（4）transaction-dependency has a negative regulatory role with the relationship betweenthe degree of strategic control, the degree of financial control, the degree of cultural controland vertical integration performance; institution distance has a negative regulatory role withthe relationship between the degree of strategic control, the degree of financial control andintegration of performance.the existing vertical integration research is very inadequate in the integrated control andthe relationship between the control and vertical integration performance, furthermore theresearch based on the China transition institution context is very weak, the paper emphasis ona vertically integrated enterprises’ internal control problem, propose a analysis theoryframework for the integrated control impacting vertical integration performance. Integratedthe vertical integration value effect research of transaction costs and synergies theory,form acomprehensive measure method of cost and efficiency gains to evaluate the verticalintegration performance, provide a theoretical reference and practice implications for thevertical integration enterprises,that is how to play a vertically integrated value through theeffective control. Meanwhile, the paper emphasizes the transition institution environmenteffect on the vertical integration of internal control, explore the role of institutional factors incorporate control behavior to some extent, rich the connotation and denotation of environmentuncertainty concept, also develop a new perspective for scenarios embedded research ofvertical integration.