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Modeling of Across-Chain Network Dynamic Competition for MNC in Industrial Cluster

Author

Listed:
  • Chunling Liu

    (Wuhan Textile University, China)

  • Jizi Li

    (Wuhan Textile University, China)

  • Guo Li

    (Beijing Institute of Technology, China)

  • Xiaogang Cao

    (Wuhan Textile University, China)

Abstract

The huge market and perfect production system in China are attracting more multi-national companies’ interest to invest in China in the form of Foreign Direct Investment (FDI). Therefore, multi-national companies are willing to integrate and optimize global supply chain networks of their own, which enable them to reduce cost and improve market response. As a result, multi-national companies usually embed into local industrial clusters through financial and technological comparative merits to sharpen their competitive edge. This paper considers the across-chain network equilibrium problem involving process of competition and melting between this new global chain and an already existing local chain. The authors model the optimizing behavior of these two chains, derive the equilibrium conditions, and establish the variational inequality formulation, and solve it by using the modified algorithm. Finally, the authors illustrate the model through numerical example and discuss relationships among the price, quantity, technological progress, and satisfaction among two dynamic phases.

Suggested Citation

  • Chunling Liu & Jizi Li & Guo Li & Xiaogang Cao, 2011. "Modeling of Across-Chain Network Dynamic Competition for MNC in Industrial Cluster," International Journal of Advanced Pervasive and Ubiquitous Computing (IJAPUC), IGI Global, vol. 3(4), pages 30-49, October.
    • Handle: RePEc:igg:japuc0:v:3:y:2011:i:4:p:30-49
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