Study On Vertical Integration Of LED Industry Chain In China

LED industry is an important choice for developing strategic emerging industries in various countries and regions,because it also accords with the concept of energy conservation and environmental protection,it has attracted much attention at home and abroad.At this stage,however,most of the domestic LED enterprise are relatively insufficient international competitiveness,actual profit has yet to reach the expected,the main reason is that they have a clear division of labor in the industrial chain,less collaboration between upstream and downstream enterprises,which improves the transaction costs of production and operation,so It is hard for them to compete with other LED giants that have been laid out abroad.The vertical integration of industry chain can deepen the cooperation between upstream and downstream enterprises,thus will improves its comprehensive strength and market share.So,it is necessary to clear the driving factor of vertical integration,vertical integration patterns and internal relation between vertical integration of industrial chain and enterprise performance.This paper build motivation-patterns-performance theory analysis framework to study China's LED industry chain of vertical integration,this paper first summarizes the development characteristics,market structure and vertical integration of LED industry in China,and finds that China's LED industry has developed rapidly,but lacks the leading enterprises with international competitiveness,LED upstream market oligopoly,and the market concentration in the middle and lower reaches is very low.Since 2013,LED the enterprise vertical integration is frequent,value-added method to measure the 31 LED the degree of vertical integration of listed companies in our country shows that the degree of vertical integration of LED industry in most enterprises in China is still low.There are two reasons for the vertical integration of LED enterprises:from the perspective of the enterprise,the main reason is asset specificity and the pursuit of scale economy.From the external environment,the special market structure of LED industry chain and related industrial policies are the driving forces of its vertical integration.Based on the data of LED listed companies,this paper makes an empirical regression on the vertical integration factors of LED enterprises.The results show that the reasons for vertical integration of the enterprise are mainly the imbalance of the market structure of upstream and downstream links,while the asset specialization,scale economy and market structure are all the reasons for the vertical integration of upstream chip and downstream LED application enterprises.In addition,this paper takes the upstream,middle and downstream enterprises of LED as the perspective,analyzes its vertical integration direction and vertical cooperation mode,then makes a statistical description of the 107 vertical integration events of 38 LED listed companies,and further selects three leading enterprises in the three links of the LED industrial chain as the case to conduct comparative analysis on the three models.Finally,taking 31 LED listed companies as samples,this paper empirically tests the relationship between the vertical integration of the industry chain and the enterprise performance.The results show that the vertical integration of LED enterprises can improve the performance of enterprises.