Abstract: Existing analysis on the circulation industry organization is usually in the framework of western industrial organization theory. In fact, the competition and monopoly of circulation industry are significantly different from manufacturing. Western theory of industrial organization is partially suitable for explaining the China’s circulation industry. This paper describes the competition and monopoly phenomenon of circulation industry, puts forward constructive ideas and frame design of the circulation industry theory, and explains this framework combing with China's reality. This paper proposes that we can consider governance and policy oriented around the market as two systems to construct circulation industry organization theory and frame design. On the basis of establishing institutional arrangements and subject behavior, this paper innovates several analytical concepts, builds the investment function and the consumption function, and makes realistic theoretical explanation to the competition and monopoly of circulation industry. This article can be considered as academic exploration for building the circulation industrial organization theory.
Keywords: Circulation Industry, Industrial Organization Theory, Competition and Monopoly, Institutional Arrangements
source:Finance & Trade Economics ,No2,2014