Mergers And Acquisitions, Centralization And The Development Of Market Economy

Merger and Acquisition concentrate industry and capital. The monopoly caused by such concentration changes market structure and behavior. The direction of market economy development is from a highly decentralized free competition structure toward monopoly competition. This is the main point of this dissertation.The development of economic theory reflects the progress of M&A and industrial concentration. We trace the development through the theories of Adam Smith, Karl Marx, and Chamberlain. The history of typical developed market economy countries shows the typical process of the M&A rule. The practices of late-developing, non-typical market economy countries whose development is quickly accelerating also obey this rule. The rule is that a country can have a mature market economy system only under the conditions of a developing monopoly competition market structure.Now China is establishing its own market economy. It is following on the path that was laid by the countries that already have a fully developed market economy. But China has different historical conditions because the international economic environment in the 21st Century is quite different from the past. Therefore, the path of M&A and concentration in China will be more complex. The author explains the laws of the development of M&A, concentration, and market structure adjustment by analyzing the laws in the perspective of theory and practice, as well as history and reality, in both domestic and international situations. This paper is an attempt to show the way for the development of the Chinese market economy in accordance with the rule.