The Study Of Industry Convergence Under "Scope Economy"

By reviewing the latest research on"Industry Convergence"problem, this paper clearly identified the definition of"Industry Convergence", and focuses the study on the most common type of Industry Convergence. Based on a simple model, this paper analyzed the essence of why division or convergence is happening. There are general assets between different industries, when unrealized scale economy of these inputs exist, or say scope economy exists, the industries are tend to be convergence. The direct motivations of Industry Convergence are technologies and regulations. Technology development offers the basic scale economy, and regulations loosen the barriers among different industries. Further the paper verified the scope economy existed among mixed-operation banking industry by the empirical work, and the scope seems to be positively related to the scale of crossed business.