Industrial Convergence Research: An Analytical Perspective Based On Corporate Behavior

As an objective economic phenomenon of cross industry,industry convergence is developing rapidly in the social economy,there are a lot of works on industry convergence in the current academic circles,but what is industry convergence,why industry convergence occurs,there are different understandings.The paper is based on the existing research results and answer three key questions:What is the essence of industry convergence?What are the conditions of industry convergence?What is the general rule of industrial convergence?Firstly,the paper reviews the literature on industry convergence,finds that there is no universally accepted definition of authority in the field of industry convergence.The paper thinks that the industry convergence is under the premise of clear industrial(including departments,industries,etc.)boundaries,only when the economic activity of a particular industry is in most companies of a particular industry or in the industry accounted for heavier,influential,representative of a small number of enterprises,and the existing industrial theory cannot be attributed to this kind of economic activities with multiple industrial attributes belong to any one of the industry's economic phenomenon,which is called" industry convergence".The basic premise of industry convergence is the existence of more than two industries,the essence of the industry is the division of labor,the emergence,formation and evolution of industry is the result of the development of social division of labor,the formation of the industry or the differentiation of the industry is the process and result of the division of labor within the enterprise.Deepening the division of labor to be constrained by transaction costs,Facing "dilemma Choice" of labor division,When the income from the transaction is less than the cost of the exchange(transaction costs),and appear the "reverse" process of division of labor,and appear the phenomenon of industry convergence,Industry convergence is institutional arrangement for reducing transaction costs and obtaining the benefits of division of labor,Its essence is the process and result of the social division of labor into the enterprise division of labor.After the definition of industry convergence,and analysis the mechanism of industry convergence,since industry convergence essence is the process and result of the social division of labor into the enterprise division of labor.the path of industry convergence is as follows:"the external social division of labor to the division of labor within the enterprise to the occurrence of industry convergence",from this path,the realization of industry convergence is the enterprise in the industry to pursue cross industry activities,expand the scope of business activities and be recognized by the market,other companies in the industry to follow up and follow suit,become the common act of a collection of enterprises(most of the enterprises in a particular industry)within the industry,finally realize industry convergence,industry convergence is the objective result of individual enterprises pursuing the maximization of profits to realize the subjective unconsciousness of cross industry activities.Therefore,the paper argues that to study the conditions of industry convergence must be from the main body of industry convergence,from the enterprise,to analysis what the conditions are to expand the scope of their activities,the choice of cross industry activities.Through the historical observation of the rise of industry convergence,the two factors that affect the choice of enterprise convergence:economies of scope of convergence industry and enterprise economies of scale,and the paper that it is not a simple coincidence that economies of scope of convergence industry,but the precondition of industry convergence.Because of economies of scope of convergence industry,enterprises seeks economies of scope,to enable enterprises to expand the scope of activities,cross industry activities,act as an industry trend,eventually led to the emergence of the phenomenon of industry convergence.But the existence of economies of scale,Will also affect the choice of industry convergence.For the enterprise,the scope of economic income is greater than the scale of economic returns,companies are more willing to choose convergence,from this sense,industry convergence means that economies of scale substitute for economies of scale,industry convergence is a result of the pursuit of economies of scope.On this basis,in this paper,we propose two constraint conditions of industry convergence:first,the external constraints of industry convergence,the profit rate of the industry and the average profit rate of the industry;the two is the internal constraints of industry convergence,the marginal revenue and marginal cost.Comparing the two constraint conditions,the critical condition of industry convergence is that the profit margin of the enterprise is lower than the average profit rate and the marginal benefit of the enterprise is equal to the marginal cost,it also finds out the logical relationship between industry convergence and the general law of industry convergence,that is,only when the profit margin of a certain industry is lower than the average profit rate of the industry and the marginal benefit of the enterprise is equal to the marginal cost,if the enterprise add to investment,the enterprise will choose the industry convergence,the paper calls that the important inference is called" industry convergence theorem".Industry convergence theorem is used to explain when the profit rate of the industry is lower than the social average profit rate and the marginal revenue of the enterprise is equal to marginal cost,the enterprises will choose industry convergence's the objective law.In this paper,industry convergence theorem is proved from three aspects of theory,mathematics and demonstration.The possible innovations of this paper are as follows:First,innovation of industry convergence the understanding,industry convergence is a kind of institutional arrangement to reduce transaction costs and obtain the benefits of division of labor,industry convergence is institutional arrangement for reducing transaction costs and obtaining the benefits of division of labor;The path of the mechanism of industry convergence is as follows:"the external social division of labor to the division of labor within the enterprise to the occurrence of industry convergence",industry convergence is the objective result of the enterprises pursuing the maximization of profits to realize the subjective unconsciousness of cross industry activities,is economies of scope for economies of scale;Two is to try to analyze the conditions and the general rules of industry convergence from the perspective of the enterprise,it makes up the deficiency of the existing research from the industrial level;The three is to propose two constraint conditions of industry convergence:first,the external constraints of industry convergence,the profit rate of the industry and the average profit rate of the industry;the two is the internal constraints of industry convergence,the marginal revenue and marginal cost;The four find the general law of industry convergence and introduce the industry convergence theorem,that is,only when the profit margin of a certain industry is lower than the average profit rate of the industry and the marginal benefit of the enterprise is equal to the marginal cost,if the enterprise add to investment,the enterprise will choose the industry convergence.The industry convergence theorem has filled the gaps in the industry convergence.Industry convergence theorem has important practical significance.Industry convergence theorem clearly points out the sufficient conditions for the enterprises to choose the industry convergence,this provides a theoretical guidance for enterprises to make reasonable investment decisions.Industry convergence means the flow of resources from one industry to another,resource flow means rational allocation of resources,conducive to the balanced development of industry,also conducive to product and industrial innovation,and promote the upgrading of industrial structure adjustment and sustained economic growth,then the government needs to provide a good institutional environment for the cross industry flow of such resources.