Research On The Vertical Integration Theory Based On The Bargaining Power Configuration Take The Vertical Relationship In Seed Industry As An Example

Ever since The Nature of the Firm by R.H.Coase is published, it has become the main stream in the field of enterprise theory research to employ transaction as the basic unit of analysis, and transaction cost as the core concept to explain the allocation of economic activities among manufacturers, markets and some hybrid organizations. Vertical integration theory research is one of the core subjects. While these researches have made great achievements, problems in their research paradigm appear, which requires innovation and breakthrough of theory. Firstly, how to absorb and integrate the research results neo-classical economics has achieved in enterprise production attribute and new institutional economics has accomplished in enterprise transaction attribute, so that we can understand the dynamic changes of enterprises and their boundary from the perspectives of production and transaction attributes. Secondly, how to combine enterprise theory research with enterprise management practice, which can explain the unification of the concept of enterprise existence and transaction cost of enterprise boundary, and authority with corresponding responsibility in enterprise management practice. Thirdly, how to adopt vertical integration theory to analyze rent distribution and dynamic changes of vertical boundary in the development of innovative industry.This research aims to integrate different researches from the perspective of bargaining power configuration to build a unified theoretical framework about vertical integration and enterprise attribute on the basis of absorbing and criticizing the prior research results of vertical integration. Meanwhile, take the seed industry as an example to analyze the relationship between bargaining power configuration and vertical governance structure. The thesis mainly adopts literature research method, history with logic and case study method. Based on the analysis of the development of vertical integration theory, bargaining power and its relevant concept, the thesis explains vertical integration theory based on bargaining power configuration from the aspects of bargaining power and resource configuration, bargaining power and enterprise theory, as well as bargaining power and vertical integration. It points out that bargaining power allocation is a key method to optimizing the distribution of resources and reducing transaction cost. Vertical integration is the optimization of bargaining power in essence. The thesis analyzes the global trend of vertical integration development since1990s, with vertical integration theoretical framework based on bargaining power configuration as the instruction. Taking eight typical cases of seed industry as an example, it also explores the relationship between bargaining power configuration and vertical governance structure, verifies and enriches vertical integration theory based on bargaining power configuration.The innovation of the thesis is embodied in the following three aspects. Firstly, it successfully establishes the concept of bargaining power and introduces it into enterprise theory research. The establishment of this concept will further people’s understanding of the source of power, its pattern of manifestation and configuration laws. Secondly, it absorbs and integrates the research results neo-classical economics has achieved in enterprise production attribute and new institutional economics has accomplished in enterprise transaction attribute, and explains the dynamic changes of enterprises and their boundary from the perspectives of production and transaction attributes, which breaks the belief in new institutional economics that the reason for the existence of enterprises and their boundary is the limitation of saving transaction cost. Thirdly, it introduces the unification of enterprise theory and enterprise management practice into the analysis framework of optimizing bargaining power configuration. It believes bargaining power configuration is the determinant in enterprise vertical governance structure and different governance structures are the patterns of manifestation of bargaining power configuration. Enterprise boundary and enterprises internal governance are all for the purpose of optimizing bargaining power configuration.The thesis has three aspects of theory or practical values. Firstly, using bargaining power configuration as the determinant in understanding enterprise essence and boundary is useful for unifying enterprise production and transaction, combining enterprise theory research and management practice, which is of great theory value for enriching vertical integration theory and enterprise essence research. Secondly, employing bargaining power of innovative rent allocation as the crucial element in explaining the dynamic changes of enterprise vertical boundary is of great instruction value for understanding the mechanism and trend of innovative industry, formulating policies for advancing the commercialization of research findings and innovative industry development. Thirdly, taking seed industry as an example to analyze bargaining power configuration is of practical instruction value for rationalizing the interest relationship among all main bodies in China’s seed industry, promoting the breeding system reform of China.