Asian Journal Of Social Pharmacy

Abstract: Objective To explore the relationship of market structure, efficiency and performance of Chinese traditional patent medicine (CTPM) industry, and to provide suggestions for the government and related enterprises to take the corresponding strategies. Methods Econometric model were empirically analyzed about 44 ongoing sample enterprises from 2007 to 2017, based on market power hypothesis and efficiency structure hypothesis of the industrial organization theory. Results and Conclusion The CTPM industry and the unlisted enterprises only conform to the relative market power hypothesis, and there is a significant positive correlation between performance and market share. The listed enterprises do not conform to the market power hypothesis and efficiency structure hypothesis: There is no significant correlation between performance and efficiency, market structure. There is no significant correlation between market share and efficiencies, while the industrial concentration has a significant correlation with efficiencies. The CTPM industry is relatively immature, so it’s necessary for the government to establish the elimination mechanism of CTPM industry in line with market rules, to enhance the industrial concentration and resource utilization efficiency by encouraging enterprises to improve management and scale production level. The government should improve the innovation policy of CTPM industry to encourage the enterprises to pursue product innovation. The CTPM enterprises, especially the unlisted enterprises should increase the market shares and enterprise performance through production differentiation.

Key words: CTPM industry, market structure, efficiency, performance