Research On The Market Structure And Optimization For Construction Industry In China

The economic characteristics of excessive competition in China's construction industry will have a negative impact on the industry and even the overall national economy. Therefore, it is urgent for us to understand the causes and mechanism underlying the excessive competition, and then to develop proper public policies to deal with it. Research on the market structure of construction industry will be able to provide theoretical support and practical ideas to solve the above problems.Based on the current situation of China's construction industry, this thesis analyzes the features of the market structure and the competition landscape. It then explains the reasons which has decided the market structure using industrial organization theory and business theory. It explores and tests the relationship among market structure, market conduct and market performance. At the last part, it proposes a path to optimize the market structure of the construction market.This thesis analyzes the factors directly affecting the market structure, measures the market structure by applying relevant market structure measurement method, identifies the basic characteristics of the market structure of China's construction industry and decides the nature of the market competition. Based on the identification of the structure of market and the nature of competition, this thesis tests the relationship between enterprise scale and degree of concentration, the relationship between business efficiency and market performance, verifies the mutual causation of "Market Structure-Market Conductr-Market Performance", and then discusses the applicability of the "structure school" and "efficiency" school in analyzing China's construction industry. Based on the understanding of the key features of market structure and competition landscape and with reference to the basic standards of efficient market structure, it then proposes optimization pathls and measures for improving China's construction market structure.As to positive analysis, this thesis uses a data sample of 19 listed companies in China to test the relationship among the structure, efficiency and performance in China's construction industry. Using the DEA methods, this study confirms that the Chicago School, i.e., the "efficiency school", can better explain the performance of China's construction industry, while the Harvard School, i.e., the "structure school" is not justified. The result shows that the performance of China's construction industry is mainly decided by the business efficiency of firms, rather than the market power of a few companies through market collusion.It further proposes in this thesis that the core of the market structure is the firm scale and company efficiency in China's construction industry. The core issue of market structure is how to coordinate the scale and efficiency, and the idea of structural optimization is supported by theories of the famous "Marshall conflict", the theory of firm scale and product heterogeneity of the Harvard School, and the theory of heterogeneous enterprise efficiency of the Chicago School. The implementation strategy of the policy of market optimization is to influence the structural characteristics, thereby to optimize the basic form of market structure. The way that the optimization policy works is that, first, by influencing firm scales, it helps to rationalize the market structure; and second, by affecting enterprise efficiency it helps to upgrade the market structure.