The Research Of Market Structure Effect Of Transnational Corporations' Investment In China

Market structure is the relation about quantity, share, scale, allocation of benefit of the enterprises, it reflects the relation of competition and monopoly in an industry. The market competition between transnational corporations and local enterprises has changed China's market competition structure and accelerated the development of market structure.For reasons mentioned above, this paper analyses the market structure effect of transnational corporations'investment in China by utilizing industrial organization theory, game theory and econometric models. The relation among market structure, market conduct and market performance is interactive. The competition between transnational corporations and local enterprises raises China's market concentration rate. The industries with low market concentration rate form monopolistic competition or oligopolistic market structure, the industries with high market concentration rate form monopolistic market structure gradually. Transnational corporations increase the difference of the products'functions, brands and service. The concentrated investment of transnational corporations in China's automobile industry has raised its market concentration rate, barrier of scale, barrier of technology and difference of the products. The market structure of China's automobile industry is changing into high oligopoly. The positive relation of market concentration rate and profit rate in automobile industry is resulted in scale economic effect. And the hypothesis of efficient structure can explain the relation between market performance and market structure partly in automobile industry.The investment of the transnational corporations has raised economic barrier of entry and market concentration rate. On the plus side, it improves China's market structure by forming scale economic effect and raising innovative ability of technology. But high market concentration rate, high market barrier of entry and advantages of products'difference of transnational corporations may lead to monopolistic behavior. In order to promote market competition , make scale and competition compatible , we should nurture local competitor, keep competition of the market, carry out WTO agreements and lower the tariff and non-tariff barrier, break the structure of single transnational corporations, promote the competition among transnational corporations, strengthen regulation research and the coordination of foreign investment policy and...