Topic:

The competitive effects of vertical integration and foreclosure

Abstract；

This paper examines the competitive and welfare effects of vertical integration and market delineation strategies adopted by BYD, a major manufacturer of electric vehicles and power batteries in China, in a market structure that is gradually becoming an oligopolistic competition. We find that vertical integration can promote competition by eliminating double marginal mark-ups; Market segmentation has the dual effect of being anti-competitive, by raising the prices of BYD's competitors' inputs, and improving efficiency, by shifting production of power batteries to firms with less experience, which is characterized by diminishing returns. Counterfactual analysis suggests that BYD would have been more profitable and consumer welfare better off if it had not pursued the market delineation strategy. Our research suggests that the importance of learning by doing should be taken into account when evaluating the efficiency of vertical integration and market segmentation.

Lecturer:

Junji Xiao,the associate professor at the Department of Economics, Lingnan University, Hong Kong. He received his PhD in Economics from the University of Toronto in 2006. His research interests include industrial organization, environmental economics, and Chinese economy.He has taught at Shanghai University of Finance and Economics, Fudan University, the Chinese University of Hong Kong, and the University of Technology Sydney. His research papers published in International Economic Review，Review of Economics and Statistics，Journal of Industrial Economics，International Joumal of Industrial Organization, Journal of Environmental Economics and Management，Journal of the Association of Environmental and Resource Economists，American Joumnal of Agricultural Economics and other leading journals in economics.

Time: May 9,2024 9:00-11:00

Venue: B321,ZhixinBuilding,Central Campus