| Summary: | 碩士 === 東海大學 === 國際貿易學系 === 93 === In past studies about Vertical Integration which all emphasize the effect of firms. In a setting where both the integrated leader and nonintegrated follower firm engage in R&D intensive industries, we discuss the economic effect comparison of Vertical Integration and Technological Cooperative when market structure is Monopoly in upstream and Leader-Follower in downstream.
The main subjects in this research are:
1. We examine the impact of product differentiation on downstream firm’s profits, price of output, output, R&D investments and wholesale price of the input.
2. We examine the impact of R&D diminishing return on downstream firm’s profits, price of output, output, R&D investments and wholesale price of the input.
3. We use comparison of downstream firm’s profits between different models to analyze the suitable strategic choices of downstream firms, furthermore, we discuss the influence on the nonintegrated follower firm’s profits fluctuate and strategic choices when downstream leader firm adopts Vertical Integration.
Our findings are:
1. The profits, price of output, output, R&D investments and wholesale price of the input of downstream firms decrease as the degree of product differentiation decreases.
2. The profits, output, R&D investments and wholesale price of the input of downstream firms decrease as the degree of R&D diminishing return increases, but price of output of downstream firms increases as the degree of R&D diminishing return increases
3. Vertical Integration and Technological Cooperative is the suitable strategic choice of downstream leader firm, and the nonintegrated follower firm cooperates with downstream leader firm when downstream leader firm adopts Vertical Integration.
Finally, this research sums up a concrete outcome, and hope it can afford some useful suggestions to business who consider to choice Vertical Integration or Technological Cooperative in strategy.
Keywords: Market Structure, Vertical Integration, Technological Cooperative, Product Differentiation, Leader-Follower
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