From unification to breakthrough: does market integration promote firm breakthrough innovation?

Breakthrough innovation (BI) drives the overcoming of technological bottlenecks and enhances economic resilience. Market integration (MI) reshapes firms’ innovation paths by intensifying competition, fostering collaboration, and optimizing resource allocation. While prior studies examine the impact of market integration on general innovation, research on strategically valuable BI remains limited. Using China’s Negative List for Market Access as a quasi-natural experiment and data from publicly listed firms, this study finds that MI promotes BI. Mechanism analysis indicates the policy works by increasing competition, enhancing collaboration, and reducing resource misallocation. Heterogeneity analysis shows that the effect is stronger for mature firms, in talent-dense regions, areas with strong intellectual property protection, and boundary cities. These findings advance understanding of MI and high-quality innovation and offer policy insights for optimizing innovation strategies.