Research On The Vertical R&D Cooperation Of Photovoltaic Enterprises In China

Solar energy is an important part of energy structure in the future. In this century, withthe maturation of photovoltaic technology and the vigorous development of PV market in theworld, PV companies in China have entered a rapid growth period." Anti-dumping andanti-bribery"-the action of Europe and the United States, which based on trade protection,lead to an awesome outcome that China’s photovoltaic industry, which hasthe notable characteristic-" both ends facing outward" and lacks of core technology, has tosuffer a near-fatal blow. At this stage, to find effective strategies to go through the crisis, assoon as possible, relates to the survival and development of the PV enterprises in China. Atthe same time, forced by the dual pressures of the R&D and product markets, whichtriggered by the current crisis, a growing number of PV companies carry out the vertical R&D cooperation. The characteristics of the strategy and the acquired conditions to favorcompetition, has important reference value for China’s PV enterprises in crisis, which areanxious to achieve technological upgrading and market competitiveness.This study uses the theory of industrial organization and game theory as analysis tools, combining with the case to carry out in-depth analysis of the vertical R&D cooperation of PV enterprises in China. The study analyses the market structure of the upstream, midstream and downstream of China’s photovoltaic industry from three-dimensions, which include the technical barriers, economies of scale and market concentration. Besides, it analyses the behavioral characteristics of the vertical R&D cooperation of PV companies in China from three visions, which include the motivation of cooperation, influencing factors and strategic. What’smore, the study analyses the vertical R&D cooperation of upstream and midstream, as wellas, midstream and downstream enterprises by game Theory. It makes out the benefits and conflicts to the enterprises which are brought by behavior characteristics, combining with the results of equilibrium. The study believes that the PV enterprises in China can form a mutuallybeneficial cooperation mechanism to help enterprises deal with the current market innovationand transaction risk effectively, and achieve stable profits, by combining vertical process innovation and differences in supply with product market strategy of differential pricing organically in the process of vertical R&D cooperation.This cooperation mechanism can not onlyreduce transaction risk, improve efficiency of innovation. As to the upstream and midstreamenterprises, it can reduce the high R&D investment of raw materials, the R&D andtransaction risks arising from asset specificity of human resource and equipment. What’s more, as to midstream and downstream enterprises, it can reduce the trading risk of solarcells in the process of mass production. And by reducing the cost of intermediate goods,improve the enterprise’s net profit and product demand of co-members. The study alsoconsidered that the biggest difference of PV companies in China R&D cooperation in thevertical R&D cooperation, is the size of Cooperation Organization. Cooperation shouldfocus on goal congruence, used the combined strategy according with the law of massproduction and learning curve pricing. It must be seen as the only way in order to reduce thetransaction costs of bargaining in the cooperation, and to improve the performance of verticalR&D cooperation.Finally, the article also pointed out that PV companies in China should be the long-termdevelopment perspective to focus on the risks and challenges faced in the cooperation.