The Theory Of Multinational Vertical Constraint

There are a lot of middle transaction forms between market transaction and firm. Besides vertical integration and market transaction or arm's-length transaction, vertical restraints are the important forms of middle transaction in the vertical production and distribution chains. Vertical restraints can be defined as any economic exchange that differs from the standard sale contract observed in perfect competition. In general market contract, when a buyer purchases a good or service, complete legal control transfers to the buyer. The buyer may resell the good at any price, to any purchaser of its choice, in any location. The most commonly vertical restraints are restrictions on the flexibility of the buyers or sellers. These complex and long-term contract arrangements affect the behaviors of firms in the different vertical chains; these contracts often confirm provisos as price, quantity, territory, service and other behaviors. Because these forms hide in middle product markets or distribution channels, and different firms operate at different levels, the academia didn't think much of the behavior characteristics of it. At transnational corporations (TNCs) level, these different middle production and distribution chains in the different countries and regions, where economic development level are imbalance, cultures and institutions are widely different. So that, these middle forms can't be clearly identified. If we can thoroughly understand these forms and participants' behaviors, it will help enterprises to choose particular vertical restraints forms. On the other hand, it will help the governments, especially host country governments, to choose feasible policies.This dissertation studies the theory of transnational corporations' vertical restraints. This study analyses the relationship of vertical integration, market transaction and vertical restraints, 1 mainly addresses the causes and forms of vertical restraints that enterprises choose in their vertical relationship arrangement. Then, this study extends to analyze the transnational corporations' vertical relationship, discusses the characteristics, benefits and obstacles of TNCs' vertical restraints. Furthermore this paper applies the vertical relationship choice model and the vertical restraints model of TNCs to explain the validity conditions of firms choosing different vertical restraint contracts. At last, this paper summarizes some significations of thevertical restraints theory in terms of management and policy.This dissertation applies economics especially modern industrial organization theories to study vertical relationship of TNCs. Besides general vertical relationship and vertical restraints theories, this paper stresses on benefits and obstacles of TNCs' vertical restraints, explains the conditions of relationship forms choice and answers validity conditions of firms choose different vertical restraints contracts. The structure and content of this paper as follows:Introduction, "Vertical restraints, vertical integration or market transaction?", introduces the outline of this study, elicits the study theme, explains the theoretical and practical significance, introduces the total situation of literature searches and summarizes some innovations of this paper and some directions of expanding research.Chapter 1, "Vertical restraints and vertical relationship: concept and relationship", regard vertical restraints as a part of firms' vertical relationship choice, defines vertical integration, market transaction or arm's-length transaction and vertical restraints respectively, then analyses three forms' relation, studies the determinative characteristics of the vertical relationship forms, and analyses the impact of environment conditions to vertical relationship choice at different factors mix.Chapter 2, "Literature review of vertical relationship and TNCs' vertical restraints", mainly introduces and analyses relevant literatures of domestic and foreign specialists and scholars. On the one hand, this chapter reviews economic theory especially...