A Study of Differences in Market Size and Asymmetric Vertical Integration

• Main Authors: Chang,Chia Hao, 張家豪
• Other Authors: 謝登隆
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/21289794342398432984

碩士 === 東海大學 === 國際貿易學系 === 100 === In this study, we analyze economic performances and strategies of two competing firms that are advantageous in their own domestic markets but face head-to-head in a bigger and more competitive third country. For example, two firms from Taiwan and South Korea, enter the U.S. and European markets which are monopolized and competition intensed markets at the same time. When 2008 U.S. financial crisis and 2010 European debt crisis occurred, these two markets suffered sudden shrinkages and as a result, a narrower gap of market scale between these two markets and Taiwan and Korea. Therefore, we attempt to study the effects on corporate Profits when the above situation is observed in the market Place. We extend the model of Milliou(2004) 、Buehler & Schmutzler(2008)及Santos-Pinto(2010). We derive an economic model to demonstrate the results. We assume that the market size of Korea is larger than that of Taiwan, and Korea firms are vertical integrated, but Taiwanese firms are not. Moreover, U.S. and European markets are the largest third-country international market. The results are as follows: 1. When the difference in market size between Taiwan and Korea narrows(widens), Korean firms decrease (increase) their Production outputs and Profits in their home market. 2. When the difference in market size between Taiwan and U.S. & European narrows (widens), sales of Taiwanese firms decrease (increase) in their domestic market. Furthermore, the market size is negatively correlated with key components Prices and the market Prices in Taiwan and U.S. & European markets all increase(decrease). 3. When the difference in market size between Taiwan and U.S. & Europe narrows(widens), both Taiwanese and Korean firms experience decrease (increase) in sales and Profits in U.S. & European markets. key words: differences in market size, asymmetric vertical integration, key components