| In recent years,China has raised the development of civil-military integration to the level of national strategy,in proposition of building an integrated national strategic system.The goal of such integration is to embed military manufacturing capacity in the industrial basis of the country,and to improve the high level manufacturing and development efficiency,relying on the open and socialized value chain,with thorough utilization of civil technology and capacity.The key to such development is to encourage civilian enterprises to compete in the research,development and production of military equipment,thereby breaking the existing industrial monopoly.However,regardless of the numerous reform attempts from the state,the desired competition has not been observed,and the monopolistic side effects of low efficiency industrywide still exists.It is with this background that this paper attempts to analyze the inherent economic principles and motives of monopoly in the defense industry from the perspective of civil-military integration,to study the mechanism and crux of the problems that prevents civilian enterprises to participate in competition,and to put forward relevant policy suggestions and reform measures for the current institutional mechanism that hinders the development of civil-military integration.This study can be of great significance in supplementing and expanding the theory of national defense economy with Chinese characteristics,promoting defense industry to break monopoly and therefore realizing fair competition between civilian enterprises and military enterprises,improving the efficiency of R&D and production,and promoting the reform of civil-military integration.The general idea of this article is as follow: Firstly,from the perspective of historical development,according to the special development path of China's defense industry and the changing course of market-oriented reform,to analyze the formation and evolution of monopoly,and to explore the historical reasons,advantages and disadvantages,and to find the new form of monopoly in new period.Secondly,based on the classical SCP model,to scan the industrial characteristics,market structure,market behavior and market performance of China's defense industry,to study the new monopoly pattern existing in the defense industry during the new period,and to find out the key factors affecting market performance and hindering the civilian enterprises from entering the defense industry.In addition,from the perspective of market competition required by the deep development of military-civilian integration,to point out the causes of difficulties for the civilian enterprises to enter the defense industry and their microeconomics.The author studies the mechanism and the crux of breaking monopoly and promoting benign competition,and puts forward solutions and policy recommendations.The full text has six chapters.In addition to the introduction and conclusion,the main research contents are as follows:First comes a stage-wise study of the formation and evolution of monopoly in the defense industry following China's development history(Chapter 2).It puts forward a three-stage theory: "centralized development" in the planned economy period,"administrative monopoly" in the transitional development period and "administrative economic monopoly" in the period of military-civilian integration.In each stage the text discusses the administrative background together with reasons and pros and cons behind the formation of monopoly.The study finds that the centralized development in the planned economy period aims at overcoming China's material shortage and underdeveloped technology,concentrating on the rapid development of defense industry,quickly achieving a series of significant results and laying the foundation for the defense industry of New China.However,the process also laid foundation of the later civilmilitary separation and the highly monopolized defense industry.The market-oriented reform in the period of transitional development has promoted the transformation of supply and demand dynamics in the market.However,existing military enterprises excluded other enterprises from entering through regulations and administrative orders,resulting in an administrative monopoly.Although such restrictions successfully struck a balance between stability and development,improved the viability of existing military enterprises by avoiding the impact of market-oriented reform on the achievements of national centralized construction,it also missed the expected effect of the civil-military integration reform.The overall productivity of the defense industry stayed low while still heavily reliant on the national defense budget.In the current stage of civil-military integration,administrative barriers have gradually been eliminated,but it remains difficult for civilian enterprises to enter.A new form of Administrative monopoly has emerged,with economic monopoly as cover.Administrative support is deeply rooted in the defense industry,yet the main goal of monopolists has shifted from fulfilling the will of the state to pursuing profits,therefore producing additional adverse effects on civilian enterprises entering R&D and production of military products.The second part studies the new monopoly pattern of defense industry in the period of civil-military integration based on SCP model(Chapter 3).Firstly,the industrial characteristics of defense industry are studied.1,the industrial chain has a "three-level inverted cone" structure,and there exists a bottom-up imbalance in product supply,which requires the introduction of civilian enterprises to supplement and expand the market entities.2,products are divided into core and non-core areas according to the importance of national security,and the scope of products in non-core areas is gradually expanding.3,the levy makes the market competition dualistic,i.e.the restricted competition in the core field and the open competition in the noncore field.Secondly,the market structure of defense industry is studied.The market concentration of defense industry is measured by industry concentration index and HerfindahlHirschman index.It is shown that the market structure of defense industry is highly monopolistic,and the scale and market share of enterprises show that the monopolists are military enterprises,while the market share of civilian enterprises is small.It is reflected in the stability of product quality and supply capacity,and it is shown that defense industry has entry and exit barriers in terms of qualification,technical experience,process equipment,first-in and scale,etc.which are the difficulties that civil enterprises shall face when trying to enter.Thirdly,the market behavior of defense industry is studied,including the military enterprises and civil enterprises main characteristics.It is found that the price competition behavior in the market is reflected in the cost competition,and the non-price competition behavior is mainly reflected in the R&D competition.Finally,this paper studies the market performance of defense industry.Through two indicators of resource allocation efficiency and technological innovation efficiency,it measures the current market performance of defense industry from the two professional fields with strong and low civil-military versatility.It recognizes that the overall market performance of defense industry is lower than that of civil-related fields.It also analyses the factors affecting the market performance,proves that government investment,differences in military and civilian industrial standards,technology gap and conversion rate of military technology achievements are the key factors that hinder the entry of civilian enterprises and the improvement of the performance of defense industry market.This conclusion is tested by empirical research.Thirdly,approaches the issue of the "asymmetry" of government investment and the military industrial standards differentiation,delves into how these problems make it difficult for civilian enterprises to enter military industrial production,and brings forward a solution pathway along with specific measures(Chapter 4).The analysis extends Dixit model to the strategic game between civilian enterprises and military enterprises.The game model is constructed to analyze in depth how government investment prevents civilian enterprises of different competitive levels from entering the market.The model further explores the impact of differences in industrial standard on such deterrence.The results show that the government's normal investment in military enterprises prevents the entry of civilian enterprises at general competitive level;the government's excess investment not only highers the entrance barrier for civilian enterprises with higher competitiveness,but also reduces the market share of existing ones.Further analysis shows that,although reducing the differences between military and civilian industrial standards can improve the overall competitiveness efficiency of the market,it alone cannot promote market entrance without altering the way the government invests.Therefore,the government should change its exclusive investment philosophy to promote investment fairness and to introduce social capital.Only then could the government ensure efficient competition and encourage the participation of high-level civil enterprises by reducing the differences between military and civilian industrial standards.Fourth,studies how the two “asymmetries”,the technology gap and lower conversion rate,could result in the low competitive willingness of civilian enterprises to participate in military industrial R&D,and suggests corresponding structural remedies(Chapter 5).The paper applies an extended version of AJ Research and development competition model on military enterprises and civilian enterprises in search of a game equilibrium.In addition,a numerical simulation is conducted to quantify the effects of the afore mentioned asymmetry.It reaches a conclusion that,though to a different extent,both factors are discouraging to potential civil players.Interestingly,however,the optimal market efficiency occurs when there is a moderate technological gap between the state owned and civil enterprises,rather than in the absence of one.Improving the technological conversion rate in the civil sector can also promote the R&D competition between the two,enabling civilian enterprises to gain market share,and helping bringing an end to the reign of the market monarchs.In addition,motivating joint R&D effort between the state owned and civilian enterprises could significantly improve the industry's Pareto efficiency.Therefore,in order to truly enable civil enterprises to compete effectively,policy changes should focus on altering the government's support schedule,generally improving civil military technology-to-product conversion efficiency,and promoting state-civil collaboration initiatives.The main innovations of this paper are in three aspects:1.Uses the classical SCP model to study the existing monopoly structure of China's defense industry.In terms of industrial characteristics,it is proposed that China's defense industry has the structural characteristics of "three-level inverted cone" industrial chain,the product characteristics of two-level classification and the market competition characteristics of dual nature.In the market structure analysis,through the measurement of market concentration,it is proved that defense industry is highly monopolized by military enterprises,and it is pointed out that the product differences of defense industry are mainly reflected in product quality and the stability of supply capability.Defense industry has barriers to entry and exit in terms of qualification,technical experience,process equipment,first-in and scale,and so on.In the analysis of market behavior,it is proposed that the price competition behavior of military enterprises and civilian enterprises is reflected in cost competition,while the non-price competition behavior is mainly reflected in R&D competition.In the analysis of market performance,it creates through comparing resource allocation efficiency and technology efficiency,showing that civil enterprises have advantages in market efficiency.Finally,through empirical research,it is found that the key factors hindering the entry of civilian enterprises are government investment,differences in military and civilian industrial standards,technological gap and conversion rate of military technological achievements.2.Explores the application of Dixit Model to the strategic game theory research of military industrial enterprises and civilian enterprises in the field of military industrial production competition.Starting from the "asymmetries" caused by two administrative reasons of the difference between government investment and civilian industry standards,this paper analyses in detail the mechanism of how government investment can help defense industry enterprises to realize monopoly in order to prevent civilian enterprises from entering the market,and finds out that reducing the difference between defense industry standards and civilian industry has both positive and negative effects on the market competition of defense industry under the condition of government investment.This paper puts forward some policy suggestions to promote the participation of civilian enterprises in the competition in the field of military industrial production from the aspects of changing the pattern of government investment,improving the fairness of government investment,guiding other capital to enter and promoting the integration of military and civilian industrial standards based on improving the mechanism of government investment.3.Attempts to extend AJ model to the R&D competition of defense industry and civilian enterprises.Through modelling and analyzing the game theory equilibrium process and numerical simulation,this paper studies the influence of technology gap and conversion rate of military achievements on R&D competition of defense industry enterprises and civilian enterprises.It is found that too large technology gap and insufficient conversion of military achievements could affect R&D willingness of civilian enterprises in varying degrees.Maintaining appropriate technology gap between military and civilian enterprises can make the total efficiency of social R&D at the highest level;improving the conversion rate of military technology achievements can promote the R&D competition between military enterprises and civilian enterprises,enabling civilian enterprises to gain more market share and enhancing the overall efficiency of social R&D;and promoting joint R&D between military enterprises and civilian enterprises can achieve a better Pareto efficiency improvement of social R&D.Accordingly,some policy suggestions are put forward,such as changing the government's support pattern,promoting the conversion of military technological achievements and improving the mechanism of civil-military collaborative innovation. |
PDF Full Text Request