Study Of The Impacts Of Vertical Integration On The Performance Of China's Coal-electricity Enterprises

Coal and electricity,as the most important primary energy and secondary energy,play important roles in China's economic development.At the same time,due to in the same industrial chain upstream and downstream,the relationship between coal and electricity is also particularly close.In 2002,the coal price "two-track system" led to the contradiction between coal and electricity gradually highlighted.Coal,as raw materials for power generation,soaring prices.Electricity providers overwhelmed,began to use the vertical integration of the way to ensure the supply of raw materials.After 2012,due to economic downturn,coal prices were cliff-like drop.The loss of coal enterprises began to get involved in the field of power generation,expect to generate electricity to make up for the loss of coal,in order to improve enterprises performance.Based on the above situation,this paper will focus on the impact of vertical integration on the performance of China's coal and electricity enterprises.The paper summarizes the basic theory of vertical trade,the research on vertical relationship between China's coal and electricity,and the impacts of vertical integration on the performance of enterprises in other industries.At the same time to learn from the experience of the predecessors and summarize the shortcomings of existing research.Then through combing the development process of China's coal and electricity relations,it is concluded that China's coal and electricity enterprises will be vertical integrating based on two reasons:to ensure the supply of raw materials and product sales,decentralized business risk.Combining with the theory of industrial organization and new institutional economics,it is found that vertical integration can reduce transaction costs,production costs and improve market entry barriers.All those advantages can improve enterprises performance.The paper chosen ten financial indexes of coal-listed enterprises,divides them into four common factors:profitability,operation ability,solvency and development ability by factor analysis method,confirms the weight and builds coal enterprise performance evaluation index system.By contrast,it is found that the coal-electricity integrated enterprises have better profitability and operation ability than the unincorporated coal-electricity enterprise,but because of the expansion of the enterprise scale,the coal-electricity integrated enterprises have very low solvency.Next,this paper uses the value added scale method to calculate the vertical integration degrees of the sample coal-electricity integrated enterprises,and select the control variables to regression analyze the influencing factors of the enterprises performance.The results show that the degree vertical integration of coal and electricity has a positive impact on the performance of coal enterprises.With the deepening of degree of the integration of coal-electricity integrated enterprises,the performance of enterprises will be improved.Finally,according to the conclusions of the study,the paper gives some policy suggestions,Coal and electricity enterprises should choose the vertical integration of coal-electricity according to their own financial situation,and the state should continue to introduce policies to support the vertical integration of coal-electricity.