Study On Interaction And Convergence Between Circulation Services Industry And Manufacturing

Industry linkages are common phenomenon in social economy. However the traditional Industrial organization theory only reveal productive linkages(or technical linkages) based on input-output among different Industries, which focus on quantitative relationship and ignore the impacts of the circulation Industry as a independent economic sector influenced by the concept of "treasuring production, neglecting circulation ".So beneficial conclusion of circulation services and other industries mutual influence degree can not be drew either. In fact, in the buyer's market conditions, the bottleneck effect of circulation is increasingly evident, circulation Industry is becoming the important factor which affect other Industries, especially for the further development of manufacturing. Straightening out the relation between circulation and manufacturing industry, and promoting their harmonious development is important guarantee to enhance economic efficiency and realize the healthy operation of national economy. From long-term look, strengthening both interactive development can also upgrade our country's circulation services level, thus improve circulation services'supportive function to manufacturing industry in order to native manufacturing cast off the "low-level locked" dilemma in value chain.Since the third social division of labor, circulation services industry is isolated from manual manufacturing, there are various and extremely complex interaction between the two Industries. Initially circulation simply assumes the function of products exchange, by series exchange to complete the goods "breathtaking jumping". Along with the continuous specification of division of Labour, as productive input service of manufacturing industry, circulation has close relation with manufacturing. Especially entering 90s of the 20th century, with the rapid development of information technology, driving by consumer demand diversity and personalized trend, global services industry has been developing rapidly, the social economy from traditional industrial economy into service economy era. On this setting, as an important department of services industry, circulation industry and manufacturing also appear convergence trend, and presents the new characteristics of both interactions.This paper takes "The interaction and convergence between circulation services and manufacturing" as research topics, and try to make a comprehensive study on the relationship between the two sectors, based on the industrial interaction angle. Firstly, we put forward the analysis framework on the foundation of reviewing existing research literatures on circulation and manufacturing relationship. This framework seeds to provide the answer to the questions such as "what is circulation service and manufacturing interaction", "why interaction" (reason), "how to interact" (process, types, etc). And then we divide the evolution process between circulation services and manufacturing into three stages or steps, namely division and collaboration, extension convergence, idea integration. Based on the analysis above, we put forward a integration proposition. Secondly, taking interaction and convergence as main line, this paper makes concrete analysis on each stages of circulation services and manufacturing interaction separately.By constructing related mathematical model, we analyze the cause of circulation service and manufacturing interaction in different stages, which includes technical progress, demand change, production flexibility and so on. We also reveal the mechanism of value-creation in different levels of circulation services and manufacturing interaction and convergence, whose content are division of labor cooperation efficiency, cost savings, knowledge innovation. On the basis of the theoretical study, the paper applies the typical case into analysis associated with our country's logistics and home electrical appliances industry practice. After that, we use panel data model and input-output analysis method to make an empirical study on China's circulation services and manufacturing relationship, furthermore, we also test the path that circulation services promote manufacturing efficiency. Finally, the paper makes some countermeasures and Suggestions to promote China's circulation services and manufacturing interaction and convergence well.This paper's innovations as follows:1. Analyzing the three stages of circulation services and manufacturing interaction. and then dividing the two sectors'interaction and convergence types, characters, motive and value creation mechanism in different phases of economic development. Any industry development is a dynamic process, circulation services and manufacturing interaction relationship are also dynamic, historical, which evolutes continuously with the economic progress and industrial development. Based on existing research, this paper organizes definitely the relation between circulation services and manufacturing for the first time and puts forward the three levels of the interaction, namely division coordination level (collaborative interactive convergence), extension convergence level (extension interactive convergence) and concept convergence level (idea import type interactive convergence). Circulation services and manufacturing's division coordination stems from the deepen development of social labor division. Circulation services industry become independent sector departed from production Industry. Long with the changes of the external environment, since the 1990s, circulation services Industry and manufacturing have broken the original border of Industry, industrial tentacles extend to each other field, with the new characteristics of Industrial convergence. Entering the 21st century, with the rapid development of information technology, services is not only value-added means, but the basic mode of production, services has become core content of social economic activities. The boundary between Circulation services and manufacturing is more fuzzy. By absorption of business philosophy to each other, circulation or manufacturing enterprise create new production method or management pattern. Circulation services and manufacturing enter into the stage of concept convergence. 2. Guided by transaction cost theory and property right theory,the paper focus on inter-industrial institutional correlation which is ignored by traditional Industrial organization theory, and analyze the basic pattern of institutional correlation between circulation services and manufacturing. The traditional industrial organization theory only pay attention to the market structure in the same industry, which is monopoly or competitive. As a result, different market structures lead to different strategic behaviors and economic performances between market subjects. Inter-organization institutional linkages (governance form) especially across different industrial organizations are ignored by traditional theory. Being different from traditional theory, inter-industrial knowledge and technology transfer are also included in this paper, furthermore, we analyze the concrete organizational arrangement form for the purpose of competitron and cooperation between circulation services enterprises and manufacturing enterprises. There are three kinds of governance structures between circulation services enterprises and manufacturing enterprises:(1) Market governance. Circulation enterprises and manufacturing enterprises complete the transaction by the market, taking goods distribution as typical example. (2) Hierarchical governance. Circulation enterprises produce itself by forward integration, or manufacturing enterprises implement distribution channels itself by backward integration.(3) Hybrid governance. Circulation enterprises allies with manufacturing enterprise and both sides form closely partnerships.3. This paper put forward the view that inter-industrial interaction and convergence is good for cultivating industrial institution innovation and motivating enterprises'production and management manner innovation. By learning and absorbing business philosophy to each other, Circulation services and manufacturing take the new form of service manufacturing and manufacturing circulation. Manufacturing enterprise change the product- oriented to service-oriented, which have made considerable profits and enhance the competitiveness of the industry by close cooperation with circulation service enterprise. Meanwhile, circulation service enterprise learn from manufacturing enterprise standardization and clusterization thoughts to create chain stores and commercial cluster represented by shopping Mall which fully realized the economies of scale and scope effect.4. The paper uses panel data model and input-output analysis method to make an empirical study on China's circulation services and manufacturing relationship, furthermore, we also test the path that circulation services promote manufacturing efficiency. By measuring and comparing relevant indicators, the results show that the resource processing and capital goods Industries consume more the transport, storage of postal services than other. In turn, transport, storage of postal services also need more resources processing (mainly oil industry, chemical industry) and capital goods manufacturing (mainly transportation equipment manufacturing, special universal equipment manufacturing, electrical machinery and equipment manufacturing) products. While consumer goods manufacturing such as Food manufacturing, garment manufacturing, wood processing and furniture manufacturing industry consume more wholesale and retailing services, which shows that most consumer goods enter final consumption field through specialization circulation departments in our country, so it verifies that circulation services is the indispensable link to social products value realization. Sensitivity and influence index show that each sub-manufacturing industry is influenced by other manufacturing sector greatly than circulation services sector, which indicates circulation services'pulling effect is not obvious. From the angle of Industry influence on other department, each manufacturing sub-industry has greater influence on other manufacturing sector than circulation services, which also reflects from the side that at this stage, China's circulation industry has not played the role what it should be, the pulling effect on national economy is quite small. Empirical study also points out, China's circulation industry increase manufacturing manufacturing efficiency by reducing transaction costs, and the intermediary role is influenced by technology innovation ability of manufacturing itself, the technical innovation ability is stronger, promoting mechanism is more evident.5. The countermeasures and suggestions to promote the development of interaction and convergence between circulation services and manufacturing are proposed in this paper. Enterprise policymakers and relevant government functional departments haven't realize the importance of the interaction between the two industries, resulting in conflict with faction short-sighted frequent in practice. Circulation enterprise's low marketization, small scale, low organizational degree, Jack of technology an high-knowledge talents restrict the ability to interact with the manufacturing industry, meanwhile, manufacturing enterprise "big and all-round" traditional organizational structure, manufacture foundry pattern, foreign extrusion of native manufacturing also disrupt services demand, coupled with the lack of credit system, and the government's long manufacturing policy preferences and the intersected management system, these factors are bad for interaction and convergence between circulation services and manufacturing. Therefore, this paper proposes that promoting China's circulation services and manufacturing interaction and convergence should deepen ideological understanding firstly. The government must transfer policy preferences and issue a series policies to promote circulation services and manufacturing industry interaction and convergence, such as strengthening the social credit system construction, accelerating circulation service industry to promote the transformation and upgrading of the manufacturing which include developing modern logistics industry and realize the docking with manufacturing, accelerating circulation services reform process to improve the level of market and the capability to support manufacturing transformation and upgrade.