Special economic zones: Econometric assessment of effects and development prospects

Abstract

Introduction. The article examines the efficiency of special economic zones and their impact on economic growth and investments. Various special economic zones have been organized in many countries over the past decades, but an overview of the international literature concerning their impact on regional development gives unclear conclusions about their long -term efficiency. The demand for the most productive tools of state support of the economy in uncertain times, prolonged stagnation and transformation processes unfold ing at the turn of the decades can explain the relevance of the paper. Purpose . The purpose of the study is to evaluate the efficiency of special economic zones as a tool for faster development of the regions in the Russian Federation. The key idea of the paper is to develop and justify an econometric model aimed to assess the impact of special economic zones on the regional development. This econometric model is supposed to give reliable conclusions about the introduction of these zones as public units of regional development. Materials and Methods . Theoretically and methodologically, the paper comes from the theories and approaches taken from institutional and regional economies. The key methods are the natural experiment and the difference -in-difference method which estimate the average effect from special economic zones on the gross regional product, investments, and employment with due regard to the overall economic growth dynamics in the country and the displacement effect caused by self- selection. The primary 2010– 2020 Rosstat figures were analyzed . Results . It has been reliably proven and national practices show that special economic zones produce an adve rse effect primarily on the gross regional product per capita and the average annual employment rate. Conclusion . The proposed model represents a novel approach in the studies. Together with the economic theory, the findings the model gave support the demand for a customized state -implemented tool for its intervention in the economic development of different territories and could persuade the authorities to adjust their approaches in practice. Further studies could be focused on finding public regulatory tools tailored for specific territories and conditions.