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Studies On The Organizational Optimization Of Network Industry Evidence From The Mobile Telephony Industry In China

Posted on:2014-06-09Degree:DoctorType:Dissertation
Country:ChinaCandidate:W T NiuFull Text:PDF
GTID:1269330401976669Subject:Industrial Economics
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Based on the yearly data of mobile communication market in China from1987to2010, this dissertation makes one study on the internal relationship between regulatory policy and market structure of the network industry.Take the telecommunication industry as an example, we realize our research goals and gives a basic theoretical reference for the organizational optimization of network industry and the realization of the optimal market structure.The market-oriented reform since the year1970s of network industry, especially the telecommunication industry, gives one important opportunity to study the organizational optimization of network industry. Because the improve of supply condition owing to technical factors and the expansion of market capacity owing to demand condition, the weakening of natural monopoly property of network industry is thus coming, which triggered an re-cognition of natural monopoly property at the theoretical level, also one wave of regulatory reform in network industry surrounding the world at practical level.Since the year1987, the telecommunication industry in China has experienced regulation reform for several rounds, including separation of government and enterprises, the establishment of the China Unicom (CU), The North-South divide on the original China Telecom (CT) and full service operation reform since the year2008. With the deepening of reform, the market structure of telecommunication industry in China has experienced one evolution from complete monopoly to oligopoly with three Operators, including CU, CT and China Mobile (CM), which gives one practical base to the study of the organizational optimization of network industry considering the integrity of the reform process.Therefore, the logical starting point for our study on the organizational optimization of network industry just is the analysis about the market-oriented reform, regulation policy and the evolution of market structure, which also constitutes the starting point and foothold for the whole conclusion. Based on the basic order of academic research,this paper is divided into eight chapters. In order to provide a background for understanding the full text, the background and significance of thesis writing is introduced in this part,also including the writing ideas and the main research method. To form the analysis basis of the theory and literatures for the full text,we make one review about related theory and literature in the second part,also with the goal to avoid repetition and low efficiency.However,the main part of the paper is the third, fourth, fifth and sixth chapters. In the third section,we try to make one analysis on the natural monopoly, the cause of the weakening and the special characteristics of "natural monopoly" for network industry.Based on the new analysis framework constructioned in this paper,we also make one analysis about "Marshall conflict" of network industry,and provide one basic selection principle for the scale benefit (SB)and competitive benefit(CB) under the condition that regulation benefit(RB) is given.In the fourth section, we try to study the basic method of competition introduction, the process of regulation reconstruction and the relationship between market structure and regulatory policies of the network industry, which constitute the the first level of the study on the two-way relationship about regulation policy and market structure, namely regulation policy constitute a direct reason for the evolution of market structure.However,the second level of the study on the two-way relationship is constituted by chapter5and chapter6.In the Fifth chapter,we make one analysis on the relationship of On-net and Off-net Pricing and market structure, and estimates the applicable range of this policy as well as the existence of the critical value. Based on new product diffusion model,we study the relationship of new product diffusion, the size of the market and regulatory reform,and also make one analysis on the existence of the optimal market structure and question that "is the three telecom operators is optimal market structure for the telecommunication industry in China?".In the seventh chapter,this paper privides some policy proposals for the optimization of industrial organization for network industry and for the development of China’s telecommunications industry. Finally, we make one summary of full text research in the eighth chapter.This research related to organizational optimization of the network industry mainly focuses on answering the following questions:1) what kind of characteristics do network industry’s Marshall Conflicts have?2) The processes of rebuilding of regulations, importing competiveness of network industry, and their influence over the whole market structure. These two parts, including analyse of related regulation policy and market strategy restriction, form the first function of the research, which answered how the implementation of regulation policies can force the market structure be optimized.3) Network industry’s pricing model and its relationship with market structure.4) Diffusion of new products, growth of the market scope and the optimized market structure in network industry. The last two parts, including analyse of related regulation policy and market structure, form the second function of the research, which answered how market structure restrict regulatory effects. Based on the analyses of these questions, this article generates the following conclusions:First, the area of the existence of network industry’s natural monopolization and its reasons are weakening and changing. The Marshall Conflicts of network industry can make the benefits the economy scale stronger than competitive energy in the certain time. But, with the weakening of natural monopolization, the competitive energy will rise again. The issue of network industry organizational optimization will focus on effective competitiveness. The network industry Marshall Conflicts’amalgamation can be achieved based on the marginal principle. To achieve the optimized market performance under the fixed regulatory proceeds in network industry, the distributions to economy scale or competitive energy should based on the following principle:the marginal effect of economy scale divided by the marginal effect of competitive energy should be equal to the ratio of their prices.Second, the effects of on-net and off-net pricing strategy on market performance are related to the certain market structure characteristics. When the market structure is not concerned, on-net and off-net pricing strategy exacerbates market performance of the mobile communication, which goes against the distribution of mobile phones. After market structure is concerned, the parameter symbol of the same variable changes. On-net and off-net pricing strategy has its critical value within the market structure. Individual pricing is endogenic driven by market structure. This critical value is equal to on-net and off-net same pricing estimated variable parameter value divided by the negative estimated mutual value. When the exponent of n,, which represents market structure, is equal to the critical value, the market is being competitive, on-net and off-net contrast pricing strategy is propitious to market performance.Third, there is a dynamic mutual relationship between regulatory effects and market structure of network industry. Regulatory effects form the basic force of market structure change of network industry. At the same time, the basic traits of market structure are important restrictions to improving the regulatory effects. This conclusion means that in network industry for certain regulation policy, there is always an optimized market structure, or based on the related date it can compute a critical value of market structure. Regulation policy’s basic direction, characteristics and the time of apply all can be explained based on this critical value. When the market structure breaks the critical value, the regulation policy should step into next cycle. Considered the organizational optimization issue mentioned in this research, in nature it is the problem of how can network industry achieve optimized market performance. Therefore, the conclusions generated from marginal principles, diffusion analyses can also be used in analysing problems related to market performance of network industry.Our study about network industrial organization optimization provides a reflection to the relevant theory of industrial organization, and designed for precise regulation policy, and provides theory basis for timing and direction of reform. Our research may exist the following three aspects of innovation:First, based on the law of marginal analysis to the network industry "Marshall conflict" issue as theory development, trying to build a "scale, regulation, competition benefits" of3d framework (S-C-R), and based on this framework, the regulation of network industries is conflict with Marshall was studied. The relationship betweenSecond, will spread the basic ways of analysis applied to the network industry in the study of correlation between market structure and regulation effect. Our study verified the regulation policy and the two-way relationship of market structure, and discusses the regulation on the implementation of the applicable range there is a market structure. Third, outside of mesh network pricing policy that price regulation policy and market structure in the study of relationship, we will market structure variables and the virtual network outside the network pricing policy for the special treatment: through variable multiplied, interactive items. The processing method for the similar problem provides a new way of thinking.But to be sure, the analysis of nonlinear model, we choose other method to discuss the stability of the model. Do conclusion this method can also provide reliable fundamental basis, but the inspection is not strict sense, the data which is the basis of the model analysis itself also has some limitations, the above factors all has certain constraints on the general conclusion in this paper, these are also in this paper, we study the deficiency, and future research need to be aware of.The future research of the network industry can expand based on the following points:First, the extension of S-C-P framework. Identifying the specific characteristics of opposing sides which exists in "Marshall conflicts "of the network industries and analyzing the specific functional form in the SCR framework, and by simplifying the functional form,try our best obtain the data of " economies of scale "and" the effectiveness of competition. Based on the basic the conclusions of this paper, we can reform the design of regulatory policy.Second.Discuss the range of application of the network industry regulation policy. Regulation policies can extend from the net-net pricing policy to other policies, so as to analysis the feasibility interval of the network industry regulation policy, and take it as a basic policy implementation guidance.Considering the basic conclusions of the aforementioned studies, in the end, I give some advices which is good for the implementation of the network industry regulation policy, the formation of competitive market environment, the introduction of industry legislation, as well as the growth of China’s telecommunications industry.
Keywords/Search Tags:Network Industry, Organizational Optimization, MarketStructure, Regulation Policy, On-net and Off-net Pricing, Fisher-Pry model, Network Externalities, Diffusion of New Products
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