Evolution Of Labor Division, The Formation Mechanism Of The Trading Efficiency With Industry Associations

Trade associations in the modern market economy play an important role, and it is called a third-party private governance mechanism, which is an important force that can not be taken place of by market and government. For China which is in the transition of economic structure and the reform of management system, Trade associations have special significance on the maintenance of industry, and the regulation of trade orders, and the promotion of the development of a trade. Affected by various factors, comparing to that of Europe and America developed countries, China's Trade associations are still lagging behind, whether at numbers and scales, or social influence. This article attempts to study Trade association's generations and development of internal mechanism, and then guide and promote the development of our country's Trade associations with the research and scientific theory.This study has a further promotion at the basis of previous research, attempting to have a new understanding of Trade association's generations and development of internal mechanism. This article are in the perspective of "the evolution of division of labor" and "transaction efficiency", making case study as the breakthrough point, and use logical methods to make deduction, and study the Trade association's generations and development of internal mechanism. First of all, we study the causes of homogeneous trade association. The evolution of division of labor is subjected to the transaction efficiency, and transaction efficiency is the contrast relationship between division profits and transaction costs. When division profits are given, how to reduce transaction costs is the key to promote the evolution of division of labor. There are substituted relationships between the endogenous transaction costs and exogenous transaction costs. The nature of Trade associations are in order to obtain the benefits of division of labor, traders improve transaction efficiency through paying exogenous transaction costs (all kind of costs of adding the Trade associations) to reduce overall transaction costs. We also focus on endogenous saving function of transaction costs of Trade associations. And then, we investigate the heterogeneity of diversity of Trade associations. The internal mechanisms of generation and development are the division of labors. With the evolution of the division of labors, the Trade associations of the same scale will continue to grow, the number of members is increasing, the degree of convergence among members will be decreasing, and the heterogeneity among the members will increase. Specifically, the reason why the market traders will join the Trade associations, is that they want to get the club and the profits of the private products that provided by the Trade associations. With the degree of convergence among its members declines, profits from the club and private Products that they enjoy decline. Therefore, at a critical point, members have incentive of quitting the original Trade associations and joining the new industry associations with homogeneity.The generation mechanisms of Trade associations in the transition period of our country are very complex, and this article explores general laws of the generation and development of Trade associations only in the perspective of "evolution of division of labor" "transaction efficiency", and in the following-up studies there are still requiring much further studies.