Has the Establishment of a FTZ Promoted the High-quality Development of the Pharmaceutical Manufacturing Industry?——Quasi Natural Experiments Based on the Establishment of the First Three Batches of Pilot FTZ

Abstract

Purpose

As a strategic emerging and high-tech industry in China, the pharmaceutical industry is significantly impacted by the establishment of free trade zones (FTZs). However, current research on the effects of China’s FTZ establishment has mainly focused on qualitative studies from a macro perspective, such as economic growth, with fewer studies providing direct quantitative evaluations from the perspective of the micro industry. This paper aims to explore the policy effects and mechanisms that promote the high-quality development of the pharmaceutical manufacturing industry, taking industrial structure upgrading as the entry point.

Methods

Based on 2009–2021 provincial-level panel data, this paper constructs an evaluation index system for the high-quality development of the pharmaceutical manufacturing industry and calculates the high-quality development level of this industry in the first three FTZ batches. It empirically examines the impact of FTZ policies on the high-quality development of the industry by adopting time-varying difference-in-differences (DID) and spatial DID methods.

Results

Overall, pilot FTZ establishment can significantly promote the high-quality development of the pharmaceutical industry. Regarding spatial effects, pilot FTZ establishment has a spatial spillover effect that promotes the high-quality development of the industry in neighboring regions. Regarding the driving mechanism, the effect of pilot FTZ establishment occurs mainly through industrial structure upgrading, which enhances the high-quality development level of the pharmaceutical industry. Regarding regional comparison, coastal pilot FTZ establishment has a smaller promoting effect on the high-quality development of the industry than inland pilot FTZ establishment.

Conclusion

This paper reveals the impact of pilot FTZ establishment on the high-quality development of the pharmaceutical manufacturing industry and the impact path from the perspective of institutional change, providing factual evidence at the institutional level for interpreting the driving factors of the high-quality development of this industry.