Does China's centralized volume-based drug procurement policy facilitate the transition from imitation to innovation for listed pharmaceutical companies? Empirical tests based on double difference model

Introduction: The normalized implementation of the centralized volume-based procurement policy for pharmaceuticals is a concerted push for supply-side structural reform of the pharmaceutical industry in China. The impact of the centralized drug procurement policy on pharmaceutical companies' transition from imitation to innovation is investigated to test whether a positive effect occurs in the innovation landscape of the pharmaceutical market. Methods: The double difference method and a series of robustness tests were used based on data from a sample of listed pharmaceutical companies in Shanghai and Shenzhen A-shares between 2015 and 2021. Results: The study found that the centralized drug procurement policy significantly contributed to the increased intensity of innovation input in the Chinese pharmaceutical industry. In terms of regional and firm nature heterogeneity, it was found that firms in the seven provinces belonging to the three economic regions had a better increase in innovation input intensity than other regions. Firms of state-owned nature had a better increase in innovation input intensity than private companies. The mechanism test found a partial mediating effect of nearly 10% for the cost of sales rate on the innovation input intensity of listed companies and a negative mediating effect on corporate operating profit. Discussion: Further research found that the effect of centralized drug procurement policy on the improvement of innovation quality of listed pharmaceutical companies was evident. The innovation development of Chinese pharmaceutical companies no longer focused on the accumulation of innovation quantity.

Drivers and Decoupling Effects of PM2.5 Emissions in China: An Application of the Generalized Divisia Index

Although economic growth brings abundant material wealth, it is also associated with serious PM_2.5 pollution. Decoupling PM_2.5 emissions from economic development is important for China's long-term sustainable development. In this paper, the generalized Divisia index method (GDIM) is extended by introducing innovation indicators to investigate the main drivers of PM_2.5 pollution in China and its four subregions from 2008 to 2017. Afterwards, a GDIM-based decoupling index is developed to examine the decoupling states between PM_2.5 emissions and economic growth and to identify the main factors leading to decoupling. The obtained results show that: (1) Innovation input scale and GDP are the main drivers for increases in PM_2.5 emissions, while innovation input PM_2.5 intensity, emission intensity, and emission coefficient are the main reasons for reductions in PM_2.5 pollution. (2) China and its four subregions show general upward trends in the decoupling index, and their decoupling states turn from weak decoupling to strong decoupling. (3) Innovation input PM_2.5 intensity, emission intensity, and emission coefficient contribute largely to the decoupling of PM_2.5 emissions. Overall, this paper provides valuable information for mitigating haze pollution.

China's Carbon Emissions and Trading Pilot, Political Connection, and Innovation Input of Publicly Listed Private Firms

Taking China's carbon emissions and trading pilot (CCETP) as a quasi-natural experiment, this paper examines the impact of CCETP on publicly listed private firms' innovation input and the moderating effect of the firms' political connection based on the difference-in-differences model. The results show that CCETP has a significantly positive effect on the innovation input of Chinese publicly listed private firms. Moreover, the political connection of executives exhibits a positive moderating effect on CCETP's impact on innovation input. Meanwhile, the effect is more significant in regions with high environmental protection investment and large publicly listed private firms. The conclusions could provide some policy enlightenment for China's carbon market, as well as a rational adjustment of the relationship between political connection and innovation input of publicly listed private firms in the future.