会议专题

The Interpretation On Vertical Decision Of Pharmaceutical Companies:A Positive Study On Chinese Public Companies

Vertical Integration (hereinafter referred to as VI) is an important strategic activity. And the research on determinants of VI helps to anticipate and analyze companies major strategic investments in the future, which is of great significance to direct analysis on investment and competition. The state-ofart researches, all of industrial economics, transaction cost theory, or real option theory, are most likely to explain VI from the perspective of industry features. However, industry practice shows that VI differs from company to company even in the same industry. This indicates that there could be micro-determinants of VI. Although resource based theory explains VI at an enterprise-level, it is from the perspective of resource restriction. Using relevant data from 1998 to 2008 of Chinese public companies in pharmaceutical industry, we analyzed both corporate-oriented and Insider-oriented determinants of VI, referring to non-industrial factors. We find that, there are two kinds of powers which drive the corporate vertical integrating or vertical specializing in pharmaceutical industry. Corporate-oriented power consists of value factors in three aspects; profitability, growth and risk. The bigger corporations are apt to more vertical specialization, due to the decrease of transaction cost (profitability-orientation). And in the areas which with poor transportation (growth-orientation) or poor government quality (risk-orientation), corporations are more vertical integration. Different from other industries, stated-own pharmaceutical companies are more special in vertical strategy. Because of the ensurence in market supply which comes from government, vertical specialization can make Stated-own companies grow more quickly, under the circumstance of high growth pharmaceutical industry (growth-orientation). Finally, poor external audit is related to vertical integration, it claims that vertical integration is one of the mean of insider controlling.

vertical integration corporate-oriented determinant insider-oriented determinant empirical study

HUANG Dan YU Yang LIU Luxun

Antai College of Economics and Management, Shanghai Jiaotong University, Shanghai, P. R. China, 200052

国际会议

2010 International Conference on Management(2010管理国际大会)

上海

英文

569-584

2010-07-24(万方平台首次上网日期,不代表论文的发表时间)