| The oil and gas industry has the highest profitability in China industrial sectors, which is almost50times of oil processing and coking and nuclear fuel processing industry, inter-industry differences in profitability is obvious. Because of entry-exit barrier, sunk costs and the existence of product differentiation, it is difficult to achieve average inter-industry profitability, and the difference is sustainable. In the view of macroeconomic situation, China’s economic growth has slowing trend in recent years, our country’s economy is entering the structural adjustment stage, so research on inter-industry profitability differences has important significance to the upgrade approach of industrial structure adjustment, and the establishment of national industrial policy.Strategic investment behavior is the general term of enterprise behavior which could influence market environment, it is aimed at increasing profit. Investment on R&D, AD and Learning by Doing are all belong to strategic investment, strategic investment behavior can influence consumer expectations of product quality and market structure, thus forming inter-industry differences in profitability.Introduce strategic investment factors as main factors of affecting profitability differences between industries, at the same time consider interaction between market structure variables and market behavior variables, and provide a new perspective for the positive correlation relationship between market concentration and industry profitability.This paper presents strategic investment behavior characteristics from R&D, AD and Learning by Doing three aspects, systematically analyzes the influencing mechanism of strategic investment behavior impacts on inter-industry differences in profitability by improveing product quality and market structure, simultaneously studies the influence of industry characteristics to strategic investment and the appropriability of strategic investment. Further, we get a model of firm and industry profitability based on strategic investment from a simple model of strategic investment, and we apply a two-stage least squares regression test with the data of463industrial industries in China from the2005to2007. The results show that R&D, AD and Learning by Doing intensity can significantly affect profitability differences between industries, the positive relationship is especially significant in consumer goods industries and high competition industries, the direct effect of market structure is relatively smaller, the interaction between the strategic investment behavior is differences in industries, industry characteristics can affect the appropriability of strategic investment, but in different industry characteristics the effects are in different directions and to a different degree. Finally, this paper recommends that the government should implement effective policies which would guide the market behavior to optimize the industrial structure, guide enterprises to select the effective strategic investment approach and intensity, so as to improve the overall level of industry profitability. |
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