Hold-up Risks And Precautionary Measures In Private-enterprises’ Participation In The Scientific Research And Production Of Military Products

Private enterprises’ participation in the scientific research and production of military products(SRPMP)has helped break the monopoly of the military enterprise on the market of China’s SRPMP,bringing vitality to the market of SRPMP,improve the market structure of SRPMP and promote the transformation and the upgrade of the national defense industry of science and technology.However,such causes as the high asset specificity of SRPMP,the non-complete rationality and the information asymmetry of both the private enterprise and the equipment procurement department have put both of them into the challenge of the two-way hold-up risks.The effective prevention of these hold-up risks is the key to liberate the top private enterprises’ worries about their participation in SRPMP.On the basis of the incomplete contract theory,this paper analyzes the inevitability of the contractual relationship and the incompleteness of the contract between the private enterprise and the equipment procurement department as well as the causes for the hold-up risks in SRPMP.Proceeding from the military-product production practice and the real life hold-up case,the paper,based on the hold-up theory,further discusses the forms and the influences of the two-way hold-up risks in the private enterprises’ participation in SRPMP.In order to decrease the negative effects of the two-way hold-up risks,this paper,by developing a game equilibrium model,comparatively analyses the two-way holdup risks faced respectively by the private enterprise and the equipment procurement department in the three cooperative stages(the early period,the run-in period and the late period)of SRPMP and puts forward the corresponding precautionary measures and suggests some assisting measures of the third party,both of which are intended to free both of the private enterprise and the equipment procurement department from worrying about their cooperation,consolidate the harmonious long-term cooperative relationship between the private enterprise and the equipment procurement department and promote the in-depth development of civil-military integration.