In Search for Consolidation: The Political Economy of Industrial Restructuring in China's Automobile Industry

2009 ◽  
Vol 12 (2) ◽  
pp. 151-175
Author(s):  
Khan-Pyo Lee
Keyword(s):  
Automotive Industry ◽  
Automobile Industry ◽  
Economies Of Scale ◽  
Industrial Structure ◽  
Economic Effect ◽  
Firm Level ◽  
Reform Era ◽  
Enterprise Groups ◽  
China's Automobile Industry ◽  
Capital Intensive

This paper, through examining the emergence and evolution of industrial structure in China's automotive industry, have attempted to assess the degree to which the country has succeeded in restructuring the overly fragmented and dispersed pattern of industrial organization in a capital-intensive industry featured by high economies of scale, the loss in economic efficiency due to fragmented structure of which is therefore greater. The result of the analyses shows that the fragmented industrial structure that emerged during the Cultural Revolution period, populated by numerous firms of sub-optimal scale that are scatted in all but a few regions of the vast country, have not only persisted throughout the reform era but in fact has become more fragmented both in terms of lower concentration ratios at firm level and greater geographical dispersal of production. Although there exist some signs of gradual progress in consolidation at the level of enterprise groups, the real economic effect of such restructuring, however, seems to be quite limited due to the lack of effective coordination and integration of operation between affiliate automakers nominally under umbrella of the same group.

scholarly journals THE EMERGENCE OF THE AUTOMOTIVE INDUSTRY IN CHINA

2021 ◽  
Author(s):  
Olga Krause ◽  
◽  
Nadiya Golda ◽  
Iryna Pinyak ◽  
◽  
...  
Keyword(s):  
Automotive Industry ◽  
Automobile Industry ◽  
Economies Of Scale ◽  
Joint Venture ◽  
Developed Countries ◽  
Engineering Industry ◽  
General Motors ◽  
Small Range ◽  
Foreign Companies ◽  
Car Market

The engineering industry, including the automotive industry, belongs to the strategic branches of the country’s economy and to a large extent determines the level of development. The Chinese automobile industry dates back to 1953, and the first automobile factory, the First Automobile Works (FAW), was started in Beijing. Over the next few years, several more car factories were established in Nanjing, Khanhai, Jinan and Beijing. The requirements of funds, technologies and automotive modernization stimulated the attraction of external investment. A number of restrictive measures have been adopted to curb external competition, reduce car imports and attract innovative technologies, including high tariff and non-tariff barriers, screening, and restrictions on foreign capital, Limiting market share to foreign companies. When signing the joint-venture agreement, the Chinese side insisted on technology transfer and subordination to the Chinese leadership. Volkswagen first built a car factory in China. Today almost every progressive car company is represented in the Chinese car market, such as Mercedes-Bens, Ford, General Motors, Suzuki, Daihatsu, Honda, Subaru, Citreon, Toyota. Most of them have partnerships with one of China’s top three car manufacturers. American, European, and Japanese automakers see China as a promising market as demand for vehicles in the US and Europe shrinks. To the Chinese automobile market, the cars are made according to the requirements of the local consumer – conservative, with high-quality design, low and middle price segment. Since 2009, foreign automobile companies have accounted for 85% of the Chinese car market. About 60% of the cars sold in China are locally produced. However, China’s automobile industry is highly fragmented and mostly consists of small companies that produce a small range of components. Such production is labour-intensive with relatively low use of advanced technologies compared to car manufacturers in developed countries, often lacking economies of scale. Research expenditure accounts for a large part of the expenditure structure. Most companies produce low-tech parts with significant import presence.

Determining the structure of pharmaceutical industry in Iran

2019 ◽  
Vol 13 (1) ◽  
pp. 101-115
Author(s):  
Sara Emamgholipour ◽  
Lotfali Agheli
Keyword(s):  
Pharmaceutical Industry ◽  
Economies Of Scale ◽  
Monopolistic Competition ◽  
Pharmaceutical Market ◽  
Data Availability ◽  
Market Demand ◽  
Firm Level ◽  
Content Type ◽  
Measure Concentration ◽  
Pharmaceutical Industries

Purpose As the pharmaceutical industry is one of the key sectors of the health-care system, the identification of its structure is of particular importance. This paper aims to determine the structure of the pharmaceutical industry in Iran to provide appropriate solutions for pricing and regulation by policymakers. Iran is a growing pharmaceutical market with over $4bn in sales, so the supply side needs to be examined to meet the domestic consumption. Design/methodology/approach This research is a descriptive and retrospective analytical study which examines the Iranian pharmaceutical industry through library studies and using pharmaceutical data of the country’s Food and Drug Administration during 1992-2016. Due to data availability in firm level, the concentration ratio of N leading firms and the Herfindahl–Hirschman index are used to measure the concentration of the pharmaceutical market in 2014 and 2016. Findings The results show that pharmaceutical manufacturing, importing companies and distributing companies play roles in monopolistic competition market, loose oligopoly market and oligopoly market, respectively. For all companies, the magnitudes of Herfindahl–Hirschman indices indicate non-competitive settings. As a result, these companies set their own prices, and market demand affects their sales. In addition, demand for medicines is shaped in the form of supply-induced demand. Research limitations/implications This research was accomplished with no computational limitation. However, it was confined to only one country, one industry and the mentioned period of study. Practical implications The pharmaceutical manufacturers have no influence on medicine prices, and government pricing regulations lessen the market power of such market agents. However, the easy entry to and exit from market stimulate producers to participate in manufacturing activities. The pharmaceutical importers may expand their imports in response to entry new actors; however, the new entrants weaken the coordination on pricing decisions. Social implications As pharmaceutical distributers act in an oligopoly market, they can collude, reduce competition and lower the welfare of pharmaceutical consumers. In such conditions, high investment requirements and economies of scale may discourage the entry of new firms. Originality/value Although there are various studies on market structure in non-pharmaceutical industries, this study is a new effort to measure concentration in the Iranian pharmaceutical market and to determine its structure.

Industrial Structure and Party Competition in the New Deal: A Reply to Webber

1991 ◽  
Vol 34 (4) ◽  
pp. 493-526 ◽  
Author(s):  
Thomas Ferguson
Keyword(s):  
Data Analysis ◽  
Political Parties ◽  
New Deal ◽  
Industrial Structure ◽  
Statistical Design ◽  
Party Competition ◽  
Investment Theory ◽  
New Material ◽  
Capital Intensive ◽  
The New Deal

This paper is a response to Webber's (1991) critique of Thomas Ferguson's (1983, 1984, 1986) essays on the New Deal and his “investment theory” of political parties. It argues that Webber's evidence is invalid and that his statistical design is conceptually flawed. The sample is defective: it includes many people it should not and it excludes others who should have been reckoned in, notably many Texas oilmen. His procedure for ascertaining corporate partisanship is inadequate, since, among other problems, it excludes large payments made to the 1936 Democratic campaign by firms such as Standard Oil of New Jersey and General Electric. The campaign finance data he relies upon are also far less complete than he implies. An entirely new data analysis is presented, incorporating not only Webber's data, but much new material from archives. The results confirm Ferguson's central thesis about the 1936 election: contributions to the Democrats in 1936 do indeed come from firms that are more internationally-oriented and capital-intensive than those contributing to the Republicans.

China's Automobile Industry: Policies, Problems, and Prospects.

1996 ◽  
Vol 69 (1) ◽  
pp. 104
Author(s):  
Samuel P. S. Ho ◽  
Eric Harwit
Keyword(s):  
Automobile Industry ◽  
China's Automobile Industry

scholarly journals Technology Transfer in China

2019 ◽  
Author(s):  
Douglas B. Fuller
Keyword(s):  
Technology Transfer ◽  
Past History ◽  
Domestic Institutions ◽  
Social Phenomena ◽  
Firm Level ◽  
Reform Era ◽  
Multifaceted Approach ◽  
Technology Absorption ◽  
Institutional Landscape ◽  
China’S Economy

The issues surrounding China’s technology transfer as a social phenomenon have changed just as radically as China’s economy has over the course of the four decades of the reform era. Not surprisingly, the concerns of the literature on technology transfer have transformed as well in order to try to keep pace with the dramatic changes in China’s economy. For this very reason, this bibliography will place a priority on the more recent scholarship, generally published in this century, because the scholarship on China’s technology transfer, and on its economy in general, has had a nasty habit of becoming quickly outdated. The bibliography also takes a wide lens on the issue of technology transfer, because one continuity across the decades of reform has been the persistence of the problem of technology absorption and assimilation, related to the weak capabilities of certain firms in China, and this problem and the concomitant weak capabilities of a substantial portion of Chinese firms over time can only be fully articulated by expanding beyond firm-level characteristics and motivations to encompass China’s institutions, politics, and past history. Such a multifaceted approach is required not only due to China’s own particular trajectory and institutions, but also because scholars have begun to recognize how various aspects of globalization, such as global value chains and networks of returnees, interact with domestic institutions to create a widely uneven institutional landscape for social phenomena, including technology transfer.

scholarly journals RESEARCH ON THE ECONOMIC EFFECT OF INDUSTRIAL STRUCTURE COLLABORATIVE AGGLOMERATION

2021 ◽  
Author(s):  
HONG-XIA WU ◽  
CHAO CUI
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Manufacturing Industry ◽  
Industrial Structure ◽  
Economic Effect ◽  
Reference Value ◽  
Economic Effects ◽  
Growth Effect ◽  
Producer Services ◽  
Conduction Path

In order to promote the coordinated development of industrial structure towards manufacturing industry and producer services and improve the level of regional economic development, the "double-wheel drive" development mode of modern service industry and manufacturing industry in developed regions or countries is studied, and the economic effect of the collaborative agglomeration of producer services and manufacturing industry is studied. The most basic economic effects of industrial collaborative agglomeration are economic growth effect and industrial structure upgrade effect. The Yangtze River Delta urban agglomeration must reasonably promote the "two-wheel" driving strategy, change the mode of economic development, relieve the crowded effect of industrial collaborative agglomeration, and transform the negative effect of industrial collaborative agglomeration on economic growth. This study has reference value in the following aspects: to ease the spillover conduction path of industrial collaborative agglomeration, to strengthen the coordinating and leading role of central cities, to accelerate industrial upgrading, and to narrow the regional income gap.

What Determines Profitability in the Indian Automobile Industry?

2021 ◽  
pp. 001946622110635
Author(s):  
Shilpi Tyagi ◽  
Varun Mahajan
Keyword(s):  
Market Power ◽  
Automobile Industry ◽  
Positive Impact ◽  
Growth Strategy ◽  
Raw Material ◽  
Investment Strategies ◽  
Firm Level ◽  
Global Competitiveness ◽  
Advertising Intensity ◽  
Jel Code

This study tends to examine the firm-level profitability determinants of Indian automobile and ancillary industry which is recognised for its global competitiveness. The study uses recent dataset to investigate the firm-level profitability determinants in the Indian automobile and ancillary industry and records the effect of shifts in profitability due to change in economic environment. This study intends at using real financial balanced panel data for a period 1999–2019 and applies the two-step system generalised method of moments regression model with robust standard errors. The study has found that lagged profitability, marketing and advertising intensity, firm’s market power and operational efficiency have exercised positive impact on firm-level profitability. Negative and statistically significant impact of raw material import intensity and export intensity highlights the need of planning and implementation of appropriate investment strategies. The findings of this study suggest that firms should pay more attention to optimise their operating expenditures, marketing and advertisement expenditures and expand their market power as a part of their survival and growth strategy. JEL Code: L25

E-Business in India

2011 ◽  
pp. 392-410
Author(s):  
Rajeev Dwivedi ◽  
Sushil ◽  
Sushil ◽  
K. Momaya
Keyword(s):  
Information Technology ◽  
Automotive Industry ◽  
Automobile Industry ◽  
Information Society ◽  
Manufacturing Industry ◽  
Recent Change ◽  
Flexible Systems ◽  
Business Transformation ◽  
Doing Business ◽  
Brick And Mortar

Business and industries have faced several changes from the agriculture society to information society. The recent change is due to Information Technology (IT) affecting many businesses and industries. It is changing the nature of business from the traditional way of doing business. The complete change in traditional business is due to IT. This is known as e-business transformation. The Indian manufacturing industry is undergoing this IT-enabled change and is still under process of click and brick system. Indian automobile companies are stressing the importance of e-business in the domestic automotive industry. The main aim of the chapter is to explain how the manufacturing and especially the automobile industry business has changed from traditional brick and mortar business to click and brick e-business. This chapter provides a study of e-business transformation in manufacturing industry in India using Flexible Systems (SAP-LAP) Methodology. The SAP-LAP stands for Situation-Actors-Process and Learning-Action-Performance. This methodology helps for understanding systematic nature of e-business transformation. The explanation of stakeholder flexibility due to e-business transformation is Industry will be explained.

Firm-Level Determinants of Foreign Investment and M&A Activity

2020 ◽  
pp. 1676-1705
Author(s):  
Mine Uğurlu
Keyword(s):  
Economic Growth ◽  
Foreign Investment ◽  
Economies Of Scale ◽  
Foreign Direct Investments ◽  
International Expansion ◽  
Firm Level ◽  
Policy Makers ◽  
Economic Implications ◽  
Cross Border ◽  
Greenfield Investments

The last decade is marked with acceleration of mergers, corporate restructuring and governance activities. M&A activity has been driven by factors such as technological change, globalization, free trade, deregulation, attempts to attain economies of scale, rise in entrepreneurship, and economic growth. Corporations need to adjust to the change in the environment and expand their markets to achieve growth and protection against volatile economic conditions. Firms can achieve international expansion through foreign direct investments (FDIs) which can take the form of cross-border acquisitions (brownfield investments) and Greenfield investments. This chapter covers an overview of the literature on the determinants of FDI forms of entry, and M&A activity followed with an empirical investigation of the firm-level determinants of foreign investment in Turkey with emphasis on cross-border acquisitions and Greenfield investments. Summary of the findings is followed with the economic implications of forms of FDI entry. The concluding remarks cover the implications of the results for policy makers.

Learn to be good or bad? Revisited observer effects of punishment: curvilinear relationship and network contingencies

2019 ◽  
Vol 34 (4) ◽  
pp. 754-766 ◽  
Author(s):  
Zhenxin Xiao ◽  
Maggie Chuoyan Dong ◽  
Xiaoxuan Zhu
Keyword(s):  
Automobile Industry ◽  
Distribution Network ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Joint Effect ◽  
Curvilinear Relationship ◽  
Content Type ◽  
Channel Governance ◽  
Observer Effects ◽  
China's Automobile Industry

Purpose Although supplier-initiated punishment is widely used to manage distributors’ opportunism, its spillover effect on unpunished distributors (i.e. observers) within the same distribution network remains under-researched. Specifically, this paper aims to investigate the curvilinear effect of punishment severity on an observer’s opportunism, and how such an effect is contingent on the observer’s network position. Design/methodology/approach This paper uses regression analysis with survey data gathered from 218 distributors in China’s automobile industry. Findings Punishment severity has an inverted U-shaped effect on the observers’ opportunism, and such effect is weakened by both the observers’ network centrality and their degree of dependence on the supplier. Practical implications The findings should encourage suppliers to focus more on the spillover effects of punishment on observers. To this end, the supplier must deliberately initiate the appropriate level of punishment severity against its distributors because an inappropriate level of punishment severity (e.g. too lenient) may unexpectedly raise the unpunished observers’ level of opportunism. Moreover, the supplier should be fully aware that observers’ specific network positions may produce varying spillover effects of the punishment. Originality/value This study enriches the literature on channel governance by revealing the curvilinear mechanism through which punishment severity influences observers’ opportunism. By applying social learning theory to channel punishment research, this study unveils both the inhibitive learning and the imitative learning forces inherent in a single punishment event, and it delineates their joint effect on an observer’s opportunism. In addition, this study outlines the observer’s vertical and horizontal relationships within the distribution network and explores their contingent roles in determining the spillover effects of punishment.

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