China’s Automotive Industry Of Vertical Integration Enterprise Performance Impact Of Empirical Studies

Vertical integration is an important economic organization types, It reflects the goods in the production and sales process Successively between stages of closer economic ties. The automotive industry is essential to modern economic development of the industry, In the world on the industry of the utmost importance. According to a world automobile industry development history and experience, Auto industry presents the scale economy characteristic, the developed countries of the car market has obvious oligopolistic pattern. Lead to this phenomenon, is one of the important reasons for the auto industry in the developed countries-a particular stage of development of the auto industry have varying degrees of the vertical integration strategy. The automotive industry as the pillar of the national economy, The relationship between China’s national economy continue and coordinated development, After decades of development and expansion, China’s auto formed a comparatively complete car brand series and production system, built Faw group, Dongfeng motor group and Shanghai automobile group, and other large automobile group, China’s major automobile enterprises have the choice of vertical integration behavior also caught everyone’s attention and interest.This paper, by using the theory of industrial organization structure, behavior--and performance (SCP) analysis framework, analyzed the car companies to vertical integration strategy of the enterprise performance influence mechanism: vertical integration can bring car production cost savings and market lower transaction costs, and technical conditions and supply and demand conditions under the condition of invariable, cost reduction will inevitably lead to the increase of enterprise profit margins; Vertical integration through the external trade and ensure the internalization of upstream and downstream of the effective information communication, auto enterprise technology innovation to produce a certain role in promoting and improve the performance of the automotive companies; Vertical integration through improving the concentration degree of automobile industry and to prevent new barriers to entry into the enterprise, and to reduce automobile market competition in enterprise level, profitability and profit margin improved.This paper of China’s automobile vertical integration and enterprise performance to the relationship between the empirical research, set a model, through the EVIEWS software used data validation vertical integration and enterprise performance relationship, the empirical results show that vertical integration and enterprise performance are related, it is through the affects transaction costs, market concentration and technology innovation indirect effects of enterprise performance.