The Impact Of The Vertical Structure Of The Industrial Chain On The Technological Catch-up Of Late-developing Countries

With the continuous deepening of the international division of industrial chain under economic globalization,industrial competition in the modern market is more manifested in the competition of the industrial chain,and the different vertical structures of the industrial chain play a vital role in the choice of competition strategies of various manufacturers.The results of different industries in the post-developing countries have been significantly different.Most manufacturing companies in the post-developed countries belong to the post-developed enterprises.Some of them have achieved technology catch-up,reaching the world-class status and even leading position.Most of them are mostly.The post-developed enterprise has not separated from low-end manufacturing.The reason is worth exploring.Considering that China’s industrial development has benefited from the international division of industrial chain under economic globalization,this article studies from the perspective of the vertical relationship between the upstream and downstream of the industry chain.Based on comparative case analysis,it is concluded that:(1)Compared with vertical integration,vertical separation allows downstream enterprises to have a more relaxed environment for technological catch-up;(2)Upstream enterprises that provide core components(or key raw materials)for downstream enterprises,Compared with the vertical separation strategy,the vertical integration strategy can use the price strategy to form an entry barrier for the backward integration behavior of downstream enterprises,thereby limiting the technological catch-up of downstream enterprises.The mathematical model is established based on the game between enterprises:(1)Under the vertical separation strategy,if both downstream enterprises choose to develop their own research or both choose not to conduct research on their own,the upstream enterprises cannot restrict the downstream market by changing the prices of intermediate products.;If one downstream enterprise chooses to research by itself and the other chooses not to research it,the upstream enterprise can squeeze the profits of the downstream enterprises that do not research by themselves by raising the price of intermediate products,but at the same time,it will also increase the profits of the downstream enterprises that are self-developed.In this market environment,the optimal equilibrium of the two downstream enterprises is to choose to develop their own intermediate products.(2)In the case of vertical integration,if the unacquired downstream enterprises do not develop their own research,their own profits will be squeezed compared with the vertical separation,but at the same time,the acquired downstream enterprises will obtain intermediate products because of the acquisition.The lower in-app purchase price leads to an increase in its own profit.And in this case,the profit and market share of the acquired downstream enterprise will be higher than that of the unacquired downstream enterprise,and the price of the final product produced will be lower than that of the unacquired downstream enterprise.(3)In the case of vertical integration,if upstream enterprises take restrictive actions against downstream enterprises,the government can take some forms of subsidies to help downstream enterprises to catch up in technology.However,pure industrial protection is not conducive to the enhancement of the competitiveness of China’s manufacturing industry chain.On the one hand,specific subsidies will improve the viability of enterprises,but on the other hand,they will reduce the innovation incentives of enterprises.Therefore,it is very important to find a balance between the two.It is necessary to ensure the sustainable development of enterprises without excessive subsidies.If it is an innovation support policy,that is,the government directly subsidizes the research and development costs of downstream enterprises,it will help strengthen the innovation incentives of downstream enterprises,but the one-time research and development subsidies may be relatively low.The above conclusions based on the establishment of the mathematical model based on the game between enterprises verifies the propositions drawn from the comparative case analysis from different levels.