Analysis of Industrial Internet Firm Size Based on Transaction Efficiency

The Industrial Internet is booming and playing an important role in industry. This paper focuses on the Industrial Internet firm size, and takes transaction efficiency as the dynamic of the firm size's changing. Through building a decision model of the firm size involved organization cost and solving the optimization problem, this paper reveals the relationship between the optimal firm size and transaction efficiency. The results show that with the increase of transaction efficiency, the Industrial Internet firms gradually improve the level of specialized production. Firms will decrease the kinds of industrial services they produce and increase the kinds of industrial services they purchase. When the sales volumes of the product and industrial services are less than the upper bound, firms expand the size. When the sales volumes of the product and industrial services are equal to the upper bound, firms reduce the size.