Technical Progress and Vertical Boundaries of Firms:The Empirical Research on Chinese Industrial Enterprises

Technical progress is an important factor for vertical boundaries of firms.Based on the theories of transaction cost,asset specificity,uncertainty and firm capabilities,this article discusses the theoretical mechanism of the influences on vertical boundaries from technical progress.Panel data constituted by time-series from 2002 to 2007 and cross-section data from industrial enterprises in our country has been used for empirical testing.The conclusion is drawn that there are very significant negative effect on vertical boundaries of firms from technical progress.The faster the technical progress,more inclinations for enterprises to specilize and decrease the vertical boundaries.Meanwhile,the scatterd market construction leads to the vertical integration.Liabilities of assets Ratio exerts negative effect to vertical boundaries.Property structure and informationization level have non-significant effect on vertical boundaries.