Abstract: Exploring how the unified national market affects corporate total factor productivity (TFP) is essential for deepening its construction and revitalizing microeconomic entities. Using data from Chinese A-share listed firms and provincial-level observations from 2010 to 2023, this paper empirically examines the TFP-enhancing effect of the unified national market. The results show a significant positive effect. Mechanism analysis indicates that this effect operates through two channels: reducing production costs and improving supply-demand matching efficiency--a“cost reduction and efficiency improvement”pathway. Heterogeneity analysis reveals that the effect is significant in the eastern and western regions and in areas with low administrative monopoly. It is particularly pronounced in labor-intensive industries and among firms facing high financing constraints, with high leverage ratios, or with high director network centrality. Accordingly, we propose unwavering efforts to advance the unified national market, remove hidden barriers in regions with severe administrative monopolies, smooth the transmission channels of cost reduction and efficiency gains, and enhance firms’ ability to align with and integrate into the national market. This will help translate the advantages of China’s mega-market into tangible TFP growth.

Key words: a unified national market, firm total factor productivity, cost reduction and efficiency improvement, production cost reduction, supply-demand matching optimization