The Research On The Influence Of Feed Enterprises’ Vertical Integration On Enterprise Performance

Based on the feed industry reality and the actual situation of the enterprises located, thispaper studies the impact of vertical integration on enterprise performance in feed enterprises.In2012, the national feed production has reached191million tons and the overall size hasbeen ranked first in the world, but faced with the complicated economic situation and marketenvironment, the competitiveness of China’s feed industry is still weak, and the ability tofight against the market risk is still insufficient. With the continuous development ofaquaculture industry and feed industry, the contradiction between supply and demand of feedingredients will further aggravate. Feed enterprises are not only facing competition within theindustry, also facing competition between upstream farming and midstream aquaculturefarming and downstream livestock slaughtering, meat processing enterprises. The role ofbusiness is also being transformed from a simple feed supplier to the industry chainintegration implementers and the level of competition in the feed industry gradually increase,which indicates that a new round of competition and industry consolidation era is coming.Based on this, investigate the effect of vertical integration on performance of feed enterpriseshas extremely important practical significance.On the basis of reviewing and summarizing the relevant literature, this article outlinesthe feed industry chain and analyses the motivation and pattern of feed enterprises’ verticalintegration, It also analyzes the panel data between2008and2012of the Chinese feedIndustry Listed Corporations, which selects ROE as enterprise performance indicator andestimates vertical integration degree by using Value Added Service (VAS). The results showthat there is an obvious positive correlation between the Feed companies’ vertical integrationindex and corporate performance. In addition, Expansion of business scale, elevation ofindustrial concentration, Improvement of capital structure and liquidity asset turnover andother factors, also have obvious effect on the promotion of corporate performance. In this condition, considering the actual development of the current feed industry, thearticle put forward some countermeasures from four aspects for all types of feed enterprisessustained, healthy and rapid development.