Abstract
This paper examines the relationships between two types of development zones in China, namely, the Economic Technological Development Zones (ETDZs) and Science and Technology Industrial Parks (STIPs), during the period 2001 to 2005. After controlling for regional characteristics, the results show that an ETDZ with a STIP located in the same region (city) attracts significantly more foreign direct investment (FDI), an indication of a complementary relationship between ETDZs and STIPs. This complementary relationship is reinforced by the fact that more exports, sales, or employment on the part of STIPs induces greater FDI to the ETDZs within the same region. However, the spillovers fall unevenly across regions. The ETDZs in the coastal regions benefit more from the presence of STIPs than those in the inland regions, which may lead to greater regional development disparities in China.
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