Has the Free Trade Zone Construction Promoted the Upgrading of the City’s Industrial Structure?

Abstract

Based on the panel data of 250 prefecture-level cities from 2006 to 2019, we adopted the idea and method of a “quasi-natural experiment” with difference-in-difference to assess the industrial-structure-upgrading effect of FTZ construction, analyze the factors and mechanisms influencing the effect, and further compare and analyze the regional heterogeneity and differences in spatial and temporal characteristics. We also propose policy recommendations to promote the orderly development of the FTZ. Empirical results show that, (i) compared with non-FTZ cities, the level of rationalization for industrial structures in FTZ cities increased by 9.69%, and the level of the advanced industrial structures increased by 7.01%. (ii) The innovation effect and the foreign investment effect enhance the effect of FTZ policy on industrial structure upgrading. (iii) Heterogeneity analysis found that the eastern and central FTZ have more significant roles in promoting industrial structure upgrading. (iv) Further spatial and temporal comparison analysis found that the promotion effect of the FTZ on industrial upgrading is temporally sustainable but with a certain lag. From the spatial perspective, the FTZ inhibits the level of advanced industrial structure in neighboring cities.