A Study On The Mixed Ownership Reform Of The State-Owned Vertical Monopoly Enterprise

In the background of China vigorously promote the mixed ownership reform, It is particular important to explore the development way to adapt to China’s national economic environment and our state-owned enterprise. This paper proceeding from the state-owned vertically integrated companies, uses the objective function that suitable for the situation of our country state-owned enterprise-sum of social welfare and part of the sales revenue to find the mixed ownership reform strategy of the vertically integrated companies in oligopoly industry.First of all, this paper study on the mixed ownership reform strategy based on two reform way of the existing state-owned of vertical monopoly enterprises:(1) Remained vertical integration enterprise structure unchanged and totally implementation mixed property reform; (2) Separated the part of natural monopoly and non-natural monopoly business, mixed ownership reform of natural monopoly business enterprises, and sales all of the non-natural monopoly property business. Using backward induction method in the complete information game infer that:If the product is lack of price elasticity of demand (less than 1), regardless of the objective function of the government is social welfare or sum of social welfare and parts sales revenue, the optimal choice for the government is keep the enterprise fully nationalization. If the product’elasticity is more than 1:If the government pursues the maximization of social welfare, then the two structure of the enterprise are able to achieve the maximization of social welfare through some specific property. If the government pursues the sum of the social welfare and the part of the sales income, it can achieve the welfare maximization under the overall privatization strategy, and the sub optimal level can only be achieved under the vertical separate.Secondly, this paper research R & D investment incentive problems of mixed vertically duopoly enterprise, through comparing the enterprise keep vertical integration and vertical separation infer:two kinds of structure of enterprise’R & D investment always have an positive proportional relation with the size of the market and the efficiency of research, and have an negative proportional relation with the cost of national company or the cost gap with the private sector. Conclusion that the advantages and disadvantages of the two enterprises structure are not absolutely, the government must be based on the actual situation of the society to decide adapt which type of enterprise structure.Thirdly, this paper combined with the research results of Neumann et al. (2005) and Yang et al. (2014) to extend the previous model. In the case of mixed vertical monopolistic competition to study the optimal proportion of the government’s property rights. Conclusion that:When state-owned vertically integrated firms do not participate in the intermediate goods trade, government’optimal property proportion have on influence of the number of integration enterprise; and the privatization degree have positive proportional relation with the policy burden and downstream competitors. When the integration enterprise participates in the intermediate goods trade, the government’s optimal privatization degree will decrease with the increase of the number of upstream enterprises, and increase with the increase of the number of downstream enterprises and the enterprise’s policy burden, through simple data simulation, conclusion that, compared to the situation of not to participate in the intermediate goods trade, the vertical integration enterprise participate in the intermediate goods’will reduce production, but it will increase purchase quantity makes the final product quantity increase and to achieve greater levels of social welfare.Finally, based on the previous research results, this paper puts forward policy recommendations on the state owned vertical monopoly enterprises mixed ownership reform from the enterprise structure and the government’policy selection.