Multinational Corporations In China M & A Market Structure Effect

The international division and the international production are developing into a direction of the wider scope and the deeper level, with the acceleration of the economic globalization, the enhancement of the trend of market liberalization and the application of network information technologies. With its bigger and bigger scale and higher and higher importance in FDI, multi-national merger and acquisition that has gradually surpassed and replaced new increasing investment has been becoming the leading style of FDI. To the accompaniment of more entering multi-national merger and acquisition, new competitive system and market action have been brought into the determination country market, which can change its competitive conditions and influence on its indexes, such as concentration, scale economy, entering barrier, and so on.Has multi-national merger and acquisition resulted in market monopoly in our country? How can the monopoly purpose of the international corporations be on guard? How is the positive market efficiency of multi-national merger and acquisition accomplished and fully used, and the bad influence cut down? These actual questions are that we must face to and solve now. Therefore, it is important to study the market structural effect of multi-national merger and acquisition in our country.Firstly, this essay reviews the interrelated theories on a basis of some basic concepts. It initiates an overall analysis of the market structural effect of multi-national merger and acquisition in our country from an angle of industry organization. Multi-national merger and acquisition mainly effect on market concentration ratio, scale economy, entering barrier and production differing, which form four elements of the market structure. Further, this determines the market structure, and then both of them determine the market efficiency. Generally speaking, multi-nation corporations have strong purpose of monopolizing market through merger and acquisitions, which can increase market concentration ratio in the country, enlarge the scale economy by internal and external effect, raise economic entering barriers, both weaken and increase the production differing. Therefore, this will improve the profit ratio of industry, increase the industry scale structure efficiency and promote technology advances. But such this shows some difference in reality and even gets opposite conclusion.Secondly, the essay puts stress on a practical analysis through choosing an approaching oligopoly market structure. In other words, it fully and accurately approaches the market structural effect of multi-national merger and acquisition by taking auto manufacturing industry for example. On the promise of simply providing information about MNC merger and acquisition in auto manufacturing industry in our country and in the whole world, it looks back the market structure and the efficiency in auto manufacturing industry in our country before MNC merger and acquisition, studies the dynamic change of that because of MNC merger and acquisition occurring from 1996 to 2005. Through comparison of them, the author finds that the trend of market concentration ratio ends failing and becomes rising and the market structure type which once was self-enclosed and plan-leading oligopoly three before international merger and acquisition is changing into open and market-leading high-oligopoly. The scale economy is notably enlarged; the production differing extent is enhanced with some weak and the entering barriers need to be specifically analyzed. All that determines such the market efficiency: the industry resource disposing efficiency becoming from down to up; the industry scale structure efficiency being improved not much clearly and the industry technologies progress having not much been made and even to some extent, following minus effect.Then, the essay gives some forecasts of the market structure effect under the development of international merger and acquisition in the motor industry in the future. It deems that it is of few possible for international motor companies to merge and acquire monopolistically. On the premise of guaranteeing competing, they can continue increasing the market concentration ratio of the motor manufacturing industry of our country. The overall trend of making the scale economy well, increasing the production differing and strengthening the economic entering barriers will not change. The motor manufacturing industry ratio of the country will continue to approach that of the world and will be stabilized. But the condition of MNC controlling core technologies difficultly changes through applying for patents and lock-in technologies.Finally, relying on analysis above, the essay give rise to conclusions as follows: international motor companies though merger and acquisition do not lead to monopoly and increase the motor industry market concentration ratio, which is useful for the motor manufacturing industry market structure changing into a mature and open oligopoly market structure. Directing against both effects from the international merger and acquisition and obstacles in the market and the process of merger and acquisition, the essay suggests that the foreign investment should be further introduced and both merger and acquisition in the nation and in the multi-nation should be encouraged.Emphasized in a dynamic angle, the study method of this essay looks at two faces of one coin dialectically, which combines theory with practice, integrates general analysis and particular research.