The Vertical Institutional Arrangement Of Coal-Electricity Industrial Chain In China

The government relaxes the control over the prices of the coal which used for generating electricity step by step from 2002 years. Then the price of the coal which used for generating electricity has been rising and this brought about coal-electricity conflicts, as well as induced the game between coal enterprises and electricity enterprises. The nature of the game is the unreasonable institutional arrangement of coal-electricity industry chain. The external display of the game is the confliction on the price of coal which used for generating electricity and the result of the game is the shortage of electricity and coal. The coal and electricity have important influence on other industries and our national economy, as well as they are basic energy resources of our country, so consummating the vertical institution arrange of coal-electricity industry chain will have important meanings to our country.Based on the industrial chain theory and the industrial organization theory, through the research of vertical market structure of industry chain, as well as the actions of coal enterprises and electricity enterprises and the actions' influences on industrial chain efficiency, the paper analyses the best selection of institutional arrangement of coal-electricity industry chain in our country. Then according to the standard of industry chain efficiency, the paper analyses the different influences of government regulation on the industrial chain efficiency under the different institutional arrangement of industry chain.The results of the research indicate that the efficiency of the institutional arrangement of coal-electricity industrial chain is inefficient and vertical integration is the best institutional arrangement of coal-electricity industrial chain, as well as the government regulation has different influences on the industrial chain efficiency when vertical institutional arrangement of coal-electricity chain is different.