Abstract
Based on the analysis of the high-speed rail industry chain, first, this paper divides the high-speed rail industry chain into infrastructure construction market and manufacturing market of mobile equipment and, second, this paper uses the empirical method of new experience industry organization to measure the market power premium of the high-speed rail upstream market. The study shows that the market power premium of the high-speed rail upstream market is 0.551, and the scale elasticity is 0.314, indicating that there is no systematic market power in the high-speed rail upstream market and there is significant scale diseconomy. The vertical market structure where “private enterprises dominate the upstream competition market and state-owned enterprises dominate the downstream oligopoly market” is further established. Based on the perspective of enterprises’ entry in upstream markets, the social welfare of the high-speed rail industry market structure is analyzed. It is found in the study that the upstream market of the high-speed rail industry has a tendency of insufficient enterprise entry, and the total social welfare increases with the increase in the number of upstream enterprises entry. What is more, the profit of enterprises in the upstream market of high-speed rail decreases with the increase in the number of enterprises in the upstream. This paper believes that policies such as stimulating upstream high-speed rail enterprises entry, providing subsidies to upstream enterprises, reducing upstream enterprises’ entry barriers, and expanding international markets can effectively improve the overall social welfare of the high-speed railway industry.
Highlights
Measure of industrial concentration, the market structure corresponding to this value is an oligopoly structure [3]
The high-speed railway is regarded as a complete industrial chain system, and the high-speed railway industry is divided into the upstream market mainly for infrastructure construction and mobile equipment manufacturing and the downstream market mainly for providing passenger transport services. e empirical method of new experience industrial organization is used to measure the upstream market power
Through the in-depth analysis of the high-speed rail industry, this paper divides the high-speed rail industry market into high-speed rail upstream market dominated by high-speed rail infrastructure construction and mobile equipment manufacturing enterprises and high-speed rail downstream market dominated by passenger transport service enterprises. e empirical method of new experience industrial organization is used to calculate the market power premium and scale elasticity of the upstream market of highspeed rail to be 0.551 and 0.314, respectively, which indicates that there is no systematic market power and significant scale diseconomy in the upstream market of high-speed rail
Summary
Since the reform and opening up 40 years ago, with the deepening of the market-oriented reform of state-owned enterprises, China’s downstream product market has basically achieved free competition, and the market mechanism has gradually played a decisive role in resource allocation. Based on the analysis of the high-speed rail industry, this paper divides the highspeed rail industry into an upstream market focusing on the infrastructure construction and mobile equipment manufacturing, and a downstream market focusing on providing passenger transportation services adopts the empirical method of new experience industrial organization to measure the upstream market power of the high-speed rail and establishes an asymmetrically distributed vertical structure of the upstream and downstream markets in which “private enterprises dominate the upstream competition market and state-owned enterprises dominate the downstream oligopoly market.”. The high-speed railway is regarded as a complete industrial chain system, and the high-speed railway industry is divided into the upstream market mainly for infrastructure construction and mobile equipment manufacturing and the downstream market mainly for providing passenger transport services. The social welfare of the high-speed rail industry market structure is analyzed based on the perspective of enterprises’ entry in the upstream market
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