| dc.description.abstract | This paper builds a theoretical model of vertical markets with one upstream and two downstream. Then, discuss whether there will exist vertical integration in different market size with goods of downstream are heterogeneous and production efficiency of downstream are different.
In this paper’s model, we can find some conclusions.(1) If market is too small, the upstream will merge all firms of downstream. (2)If market is small but there are at least one firm of downstream in the market, the upstream will not merge any firm of downstream. (3)If market is normal, the upstream may merges firm with high efficiency of downstream when efficiency of downstream lot worse and product substitution of downstream close. Or, the upstream will not merge any firm of downstream. (4)If market is too large, the upstream will not merge any firm of downstream.
And we have some conclusions by these findings:(1)If efficiency of downstream lot worse and product substitution of downstream is small, then, there are the presence of vertical integration when the market is too small and the more likely the presence of vertical integration when the industrial rising(market is notmal). (2)If efficiency of downstream lot worse and product substitution of downstream close, or if efficiency of downstream close, then, there are the more unlikely the presence of vertical integration when the market increase. | en_US |