Dynamic Mergers Drive Industrial Competition Evolution: A Network Analysis Perspective

Abstract

This paper presents a novel method to explore the relationship between dynamic mergers and evolution of industrial competition by introducing complex network tool. Taking the beer industry of China as an example, we establish Markets-Firms bipartite time series networks, weighted Markets-Firms time series networks and industrial competition time series networks by using the data from 1992 to 2009 respectively. Through analyzing the changes of topology index on these networks, we find that dynamic mergers play a key important role in the evolution process of industrial competition. The results show that dynamic mergers promote the local fragmented submarkets to be consolidated into a global market for this industry, and they also show the evolution process that competitive relationship among rivals turns from local segmented markets to a global cross-market gradually. In this paper, we provide a new view to observe the changes of industrial competition relationship driven by dynamic mergers.