A Unified National Market and Industrial Chain Resilience: Discussion on the Cooperation Decision of the Distance between Upstream and Downstream Enterprises

Abstract

Accelerating the building of a unified national market that is efficient, well-regulated, competitive, and fully open will promote the smooth and extensive flow of commodity factors and resources. This provides comprehensive market conditions for enhancing the resilience and security of China’s industrial chains. Analyzing data on domestic market integration across Chinese provinces from 2010 to 2023 and related data on listed enterprises, this paper examines the impact of building a unified national market on industrial chain resilience and its operational mechanisms. The findings indicate that the building of a unified national market significantly enhances the resilience of the upstream, downstream, and overall industrial chains. The underlying mechanisms involve an increase in enterprise total factor productivity and a reduction in production costs. Furthermore, this effect exhibits significant heterogeneity at the provincial, industry, and enterprise levels. Further analysis reveals that increasing technological and credit distances between upstream and downstream enterprises within the industrial chain weaken the positive effect of building a unified national market on industrial chain resilience. Therefore, enterprises ultimately choose to transfer their production collaborations. This paper elucidates the theoretical logic for enhancing industrial chain resilience through the building of a unified national market, offering important insights for developing secure, stable, and resilient industrial chains in China.

Keywords

building a unified national market / domestic market integration / industrial chain resilience / combination of supply and demand / distance between upstream and downstream enterprises

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Higher Education Press