The Influence Of Market Structure On Industrial Technology Innovation

Innovation-driven development strategy is the basic state policy of China,which relying on industry and the enterprises,the technological innovation impetus of enterprises,even the industry differ from each other under different market structure,so a fundamental issue of reform is,what market structure is most beneficial to industrial technological innovation?Based on the recent development of transaction cost theory,scale economy theory and enterprise boundary theory,this paper constructs a theoretical model to analyze how market structure affects industrial technological innovation.There are differences in efficiency between different organizations in different stages of innovation,the difference of innovation efficiency promotes the vertical division of labor and the organization complementation of innovation,and the technology competition changes the relationship among enterprises in the same industry,which has both competition in the production market and collaboration in the technical market.The competition between the different innovation chains makes the leading manufacturers in the industry to have the technical trade with the potential competitors.It is the difference of valuation between the leading manufacturer and potential competitor to the same new technology that causes the technical transaction after innovation.In order to explain the difference of valuation,this paper expand the original "efficiency effect" model from Cournot model to Starkelberg model,introducing entry barrier as the key dynamic factor into the model.This paper indicates that the increase of market concentration under low entry barriers can extend the technical valuation difference between incumbent companies and potential competitors,the valuation difference then overcomes the transaction costs and promote the technology transaction,transfer the innovation which were made within the enterprise to the innovation which under the market mechanism,finally,increasing of market concentration under low entry barriers promote industrial innovation.In order to test the theoretical model,the paper constructs the dynamic panel model using the data from 2005 to 2016 manufacturing market structure and technology innovation.Empirical research confirmed the conclusions.Because the factor of industrial profit and enterprise scale is not obvious in the dynamic model,it shows that the enterprise scale and industrial profit are the result of technological innovation rather than the reason.Base on the results above,this paper puts forward the following policy suggestions:we should break the entry barrier and improve the market concentration to promote the investment of industry research and innovation;we should restore function of seeking the enterprise boundary to the market mechanism,and expand the area of market coordination.