The Research Of The Concentration Of The Chinese Iron And Steel Industry

As an energy-intensive industry, Iron and steel industry plays an important role inautomobile, home appliances, shipbuilding, traffic, railway, war industry and thedevelopment of new industry. With high external diseconomy, higher financial andtechnical barriers, the iron and steel industry is characteristic of economics of scale.As we all know, in recent ten years China’s iron and steel industry concentration hassubstantially decreased. However, improving the degree of the industrialconcentration is still the main trend in the iron and steel industry.The factors influencing the iron and steel industry concentration include barriers toentry, fixed assets investment, industry performance, industry policy and so on. Bysetting the VAR model about the industry concentration, we make the conclusions asfollows: the last issue of industrial concentration and current industrial concentrationare highly related; the higher is the barriers to entry, the higher the degree of industrialconcentration; although the Government intervention has some lag effect, industryintervention actually improve the degree of industrial concentration; Industryperformance significantly influence the Industry concentration; Investment in fixedassets, the progress of science and technology, technology innovation are stable, butits dynamic effect is not significant.By constructing the VAR model of Chinese iron and steel industry, we can makesome conclusions. First of all, reasonable entry and exit mechanism should befounded to make iron and steel industry more convenient. Secondly, although industrypolicy has some time lag effect, it still plays an important role in improving the ironand steel industry. In the short run, based on the industry policy, government canquickly improve the concentration. However, in the long run, the mechanism ofmarket competition should be recommended.