On Large Enterprises

Many economists, from Adam Smith, Carl Marx, Marshall to Bain, Galbraith and Chandler, have treatises on the tendency of enterprises' becoming larger. In more than two hundred years, we can see the track of their thought in their respective works: the Wealth of the Nations, Principles of Economics, the Theory of Industrial Organization, Monopoly and Economic Concentration, and Visible Hand. During this time, researches on big business almost developed along two roads: one is the theory of industrial organization in western economics, which focuses on applying "structure-conduct-performance" mode to studying the formation and development of big business; the other is the theory of capital concentration in Marxism, which profoundly analyzes that in competition the motivation of pursuing surplus value drives enterprises to expand, and finally the general rule that competition results in concentration which further results in monopolistic large firms is drawn. However, these studies only focuses on those industrialized countries with perfect market system and numerous large firms. For a long time, in our country, economics field's researches on big business have been mainly introduction of theory and firms' development practice in other countries rather than been independent and systematic. Especially there are few research fruits on the development of our big business.Since 21 century, the development tendency of economy in the world has shown that therepresentative of big business-"Global 500" will become important backbone of countries'economic development and leading force in international competition. Since we reformed and built socialist market economy, our large industrial firms have made much progress. But compared with those large companies in advanced capitalist economies, our firms have a distinct gap to fill up, whose competence does not match our increasing national power and large firms' significant roles. Although a number of industrialized countries developed large firms triumphantly, their ready-made patterns are not suitable for development actuality in our country, since there are differences in countries' industrialization course, market evolution degree, and industrial organization. Confronted with transnational merger tidal wave in globalization, international competition after entry into WTO, and embarrassment in the course of economic system shunt, how to re-understand the formation and the role of big business, what are up-to-date tendency in large firms' development, and how to develop our own large internationally competitive companies become practical and urgent problems in China's economic development.Based on the theory of capital concentration in Marxism and some useful research fruits in western economics, this paper, composed of six chapters, combines normative and historical analysis with positive and logical analysis to study systematically the formation, function, industrial distribution, necessity and developing trend of big business. In the mean time, the paper summarizes three patterns used to develop big business according to large firms' growth history of some countries. Beginning with the situation of our country, and considering Chinese large firms' experience, status quo, existing problems and challenge, this paper put forward a pattern suitable for our economic shunt and strategic target of constructing large internationally competitive companies: market as dominant, policy as guide, and enterprise as principal, and some relevant suggestions.Certainly, the development of China's big business is a complicated problem. It is not easy to grasp it profoundly. This paper just does some groping researches, so deficiencies in it are unavoidable. All of the correlative propositions need further study.