Services trade innovation and supply chain efficiency: evidence from China’s services trade innovation pilot programme

This study examines whether institutional opening in services trade can relax these constraints and improve firm-level supply chain efficiency. Using China's pilot programme for the innovative development of services trade as a quasi-natural experiment and listed-firm data, we identify the mechanisms through which the policy affects inventory decisions.

The results show that the pilot programme significantly reduces non-finished-goods inventories and improves supply chain efficiency. The finding remains robust after propensity score matching, controls for other contemporaneous policy shocks, and instrumental-variable estimation. Mechanism tests indicate that the policy operates through three connected channels: shortening upstream procurement lead time, promoting midstream digital transformation, and diversifying downstream customers.