China’s Civil-Military Integration and Regional Defence Innovation: A Quasi-Natural Experiment Based on National Industrial Zone Policy

Xiaoxin Yang and Han Zhang

Defence and Peace Economics, 2025, vol. 36, issue 5, 653-682

Abstract: As a key national strategy, the Civil-Military Integration (CMI) not only drives upgrading and transforming military industries but also explores pathways for defence innovation modes. Utilizing panel data from 31 provinces between 2005 and 2020, this study employs China`s industrial zone policy – specifically, the‘National CMI Industrial Zone (NCMIIZ)’ – as a quasi-natural experiment. The Difference-In-Difference (DID) models are used to estimate its causal effect on regional defence innovation (RDI). Furthermore, the study identifies the channeling roles of three industrial mediators through which the NCMIIZ policy affect RDI. The core findings reveal that the NCMIIZ policy significantly improves both the quantity and quality of RDI. Moreover, the NCMIIZ policy implemented in local effectively benefits RDI of neighbors geographically or economically, demonstrating positive spatial spillover. The NCMIIZ policy has a pronounced positive impact on RDI of provinces in western China, provinces with high defence support, low technology marketization, and those located 400-800 km from the policy implementation areas. Notably, the industrial structure, industrial linkages, and industrial agglomeration serve as positive intermediaries between the NCMIIZ policy and RDI.

Date: 2025
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DOI: 10.1080/10242694.2024.2403425

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