Study Of Entrepreneur's Innovation And Market Power Building

The new type of international division of labor is characterized by the way value chain is formed:mixed factor input by relevant parties along the production chain. Under this background, international competition is getting much fiercer, while Chinese enterprises can gain their share of interest by participating in it with primary factors such as labor, etc., they are faced with a disadvantageous situation in comparative benefit distribution due to the leading status of multinational firms of developed countries, which might very likely result in "lock-in" on the part of the Chinese enterprises. The key to solve this problem is the building of market power. Studies show that innovation (or R&D) based on market power has strong external economies, with social rate of return three times as high as individual rate of return. Market power can enhance innovation and ensure increasing marginal returns, making social rate of return much higher than individual rate of return, thus having a positive net effect on social welfare. Most of the past leading researches indicate that:under the implied premise of a mature market and the perfect price mechanism, it is automatically that enterprises'market behaviors will pursuit efficiency and then get the market force. However, China is now in the transformation and development of economy, it is obviously that this kind of'mechanism'is facing the information barriers. Under the conditions of the market imperfections and relative factor prices distortion, how does market power to be improved? What is the source of the driving power? In fact, if the theoretical improvement of market power wants to transform into the real benefit enhancement, it has to get through the transmission mechanism of the real world. The core element of this transmission is entrepreneurs. This is also the answer of those two important questions that we have just mentioned before. However, as to the efficiency and sustainability of this transmission are fundamentally depend on the excitation, distinction, externalization and development of Chinese entrepreneurs through China's market-oriented policy transformation. So the exploration and unveiling of the interactive mechanism of entrepreneur innovation and market power building and the way of its realization can not only benefit the society with great positive externality, but also has important theoretical value and remarkable practical importance for China's rise of status in international labor division and acquiring more comparative benefit.According to the unique factor endowment structure and policy restriction in China's early stage of economic transformation, this thesis, at first, revealed the importance of entrepreneurial innovation in the context of economic transformation and building the market power in China. Then, this thesis created a'triangle' analytical framework by using two dimensions --- technology and market, to explore the mechanisms of the entrepreneurial innovation which was characterized by elements optimum distribution through the enhancement of market power. Thirdly, the thesis did an empirical analysis about the data and case study of the automobile industry. At last, this thesis analyzed the externalization mechanism and development pathway of entrepreneurial elements in the context of the enhancement of China's market power, and then put forward some countermeasures and suggestions.The creative explorations of this study are as follows:1. This study revealed the special importance of entrepreneurial elements build in the context of China's economic transformation, expanded the connotation of'SCP' research paradigm against the reality of China. Under the special institutional transformation and the structure of factor endowment, as the dominator of a package of elements, the entrepreneurs'creative behaviors can play a critical role in building the market power. This would not only expand the connotation of traditional theories, but also increase the explanatory power of reality, and then it can provide the positive thinking styles of reverse the disadvantageous positions of China's enterprises in the context of international labor division and also improve their international competitiveness.2. The channel control of precursors of product broke the limitation of George Akerlof's adverse selection theory (1970), it is different from the'market of lemons', the market of high-end precursors of product is characterized by good quality and high price as well. Those two different markets have the essential differences on their connotations, that is:the former one will make the entire market deteriorated, but the later one can increase the excitation of innovation through the enhancement of market power as a result of this, it will improve the productivity of the entire industry, then it can form the'good money drives out bad' instead of 'bad money drives out good'. The channel control of precursors of product usually has a really strong hidden circuitous nature due to the strategies of internal pricing. The excessive profit is the critical foundation of the continuous technology innovation.3. According to the estimation of entrepreneur innovation, this thesis is trying to introduce the hypothesis of enterprise heterogeneity. Because all the efforts that entrepreneurs made need to be examined, screened and tested by the market, we can only estimate those situations'afterwards'. However, after we introduce the enterprise heterogeneity hypothesis, the market value of enterprise can be the evidence to estimate the entrepreneurs'efforts; the rate of changes of those typical listed companies can have a comprehensive, systematic and integrated reflection on the situations of how the entrepreneurs do the resources optimization of a package of elements, it has a clear demonstration as well.