Effects Of Special Economic Zones Research Articles

Special economic zone efficiency factors given Russia's circumstances

Subject. This article discusses the importance of special economic zones in solving problems related to attracting investors, supporting regions of concern, and creating regional growth poles. Objectives. The article aims to consider the impact of economic and geographical location, characteristics of the region of base, the investment policy implementation quality, and the level of tax burden on the efficiency of Russian special economic zones. Methods. For the study, we used the Data Envelopment Analysis (DEA) technique, and a regression analysis. Results. The article presents the results of the analysis of the effectiveness of budget investments in the infrastructure of various special economic zones in Russia. Conclusions. The quality of the implementation of the regional investment policy has the most significant impact on the success of the development of special economic zones. Improving the methodology for assessing the effectiveness of special economic zones requires the collection and use of information on the results of scientific, technical and innovative activities of residents, taking into account the practices of the Ministry of Science and Technology of China.

Special economic zone dynamics and firm performance: Evidence from an emerging economy

AbstractThe empirical literature on Special economic zones (SEZs) has shown that SEZs have become critical policy tools for advancing economic and firm performance, especially in developing economies where financial capital, human capital, technology and technical know‐how to drive these performances are in limited supply. While the importance and effects of SEZs cannot be overemphasised and are well documented, particularly in Asia, SEZs' operationalisation, structure and policy practice appear to vary, especially in Ghana and hence a need to examine SEZ effects on firm performance in Ghana. Thus, following the difference in the structure and practice of SEZs and its limited empirical evidence in African emerging economies, this present study employs analysis of variance, treatment estimation and regression models covering 328 firms between 2018 and 2021 to shed insights on how SEZ dynamics/features affect firm performance (measured with total factor productivity, labour productivity, profitability, revenue generation and value added) in Ghana. Our results suggest firms operating under SEZ dynamics have varying significant effects on firm performance. Thus, while firms registered as SEZ firms and operating in SEZ enclaves and firms registered as SEZ firms and operating outside SEZ enclaves have significant positive effects on the performance indicators of firms, firms that are not registered as SEZ firms and operating outside SEZ enclaves detracted firm performance. Clearly, firms that possess SEZ dynamics/features tend to promote performance of firms as denoted in the empirical literature and theoretical approaches to SEZ. Arguably, the tax holidays, cheaper tariffs and infrastructural benefits derived by SEZ registered firms boost their productivity, revenue and profit performance higher than non‐SEZ registered firms. These results suggest policymakers/government should reduce administrative bottlenecks of registering as SEZ firms and operating in SEZ enclaves to increase the number of SEZ firm operations to induce performance and create room for fiscal revenue.

Effectiveness of Special Economic Zones as a Strategy for Economic Development in Sri Lanka

Economic development is the ultimate destination of human civilization commenced with subsistence agriculture to globally industrialized output, served with artificial intelligence-based services, for the purpose of enhancing standards of living. Uneven distribution of resources in the globe was mapped with an economic intention as in the form of investments to accomplish desired economic development goals in given geographical boundaries without claiming against the natural realities. Nations, governments, and business partners designed deliberate gatherings with respect to clearly defined boundaries as various forms of zones to undertake economic, socio cultural, technological and political paradigms in the long run. The main objectives of the article is to evaluate the effectiveness of special economic zones as a strategy for economic development in Sri Lanka. In addition, it is expected to explore the evolution and scattering of special economic zones in the Asia, to identify the role of special economic zones in Sri Lanka and to investigate challenges and prospects of promoting special economic zones in Sri Lanka. The study is purely based on secondary data and qualitative analytical approach is used to derive conclusions. Investment attempts by Sri Lanka after trade liberalization broaden the scope of industrialization as it led towards novel experience to both production and consumption while making sensible structural changes. Export Processing Zones transferred villages to cities not only adding value to the gross domestic product but also to human lives. The portfolio of especial economic zones of Sri Lanka was expanded with the time but within limited scope of operation. Corruptions, delays, cost inefficiencies and policy mismatch are key challenges for Sri Lanka to overwhelm, in order to attract foreign direct investments. However unmatchable locational advantage, resource endowment, literacy as well as upcoming investment zones like Port-City are the core prospects to position demand for foreign direct investments in the region.

Special Economic Zones (SEZs) Impact on Poverty in Indonesia

Special Economic Zones (SEZs) have been implemented in Indonesia to promote economic development and attract foreign investment. In economic literature, there is still debate, as the available literature still needs to provide a clear conclusion on how place-based policies such as SEZs can affect well-being. The synthetic control method is employed in this study to examine the impact of SEZs on poverty rates at both the district and city levels using data from 2005 to 2021. By delving into the relationship between SEZs and poverty, this study seeks to shed light on the effectiveness of SEZs in addressing poverty in local communities. It compares it with the counterfactual district/city, a synthetic of districts/cities that do not have SEZs in their region. The results of this study found that of the eight districts/cities that have SEZs, the existence of SEZs has a varying impact on poverty levels, with an increase in poverty in four districts/cities and a decrease in poverty in the other four districts/cities, the study also reveals the complexity of the social impacts of place-based policies like SEZs.

Effects of Special Economic Zones on FDI in Emerging Economies: Does Institutional Quality Matter?

This study attempts to prove that emerging markets could partially improve institutional quality in a specific area and benefit the local economy despite the rest of the area having poor institutions. Interestingly, we observed that despite the presence of institutions of comparative disadvantage, emerging economies continue to constantly attract significant foreign direct investment. Hence, this study focuses on a type of place-based policy in China that provides a standard favorable institutional environment in a specific area. Using data from China’s Annual Survey of Industrial Firms and combining official lists of Chinese special economic zones (SEZs), we obtained a dataset of 2660 SEZs from 1998 to 2018, and a sample of 37,251 from 1998 to 2013. Then, we empirically examined the impact and mechanism of SEZs on foreign investment by using time-varying difference-in-difference specification. After a sequence of validity and robustness checks, we found that the establishment of SEZs significantly enhances foreign entry. We also found that partial institutional quality improvement of SEZs is a key mechanism in the location of foreign investment. We conclude that it is beneficial for the government to impose place-based policies such as SEZs that improve partial institutional quality efficiently and promote the local economy.

Оценка эффективности управления особой экономической зоной промышленно-производственного типа «Лотос»

The article highlights the importance of creating and operating the special economic zones in Russia in order to increase the investment attractiveness and competitiveness of the entities and strategically important industries in the Russian Federation. Traditionally, shipbuilding has been a priority economic activity in the Astrakhan region, which has led to creating an industrial special economic zone Lotоs, whose purpose is defined as formation of a local chain of shipbuilding and machine-building products in the south of Russia. The effectiveness of special economic zones is an integrated characteristic of the management company's ability to achieve the goals 
 of creating and operating a special economic zone. As a result of the analysis of investment attrac-tiveness of the industrial special economic zone Lotоs, the problem areas of the management company's activities were identified: creating infrastructure facilities and attracting residents and investors. The substantial characteristic of investment projects of the residents (type of economic activity and its compliance with the objectives of the industrial special economic zone Lotоs, expected period and volume of investment, employment status, level of multiplicative effect on the regional economy) allowed formulating a conclusion about the necessity of differentiation of the state support for the investment projects of residents. There have been given the substantial characteristics of the projects of the residents: Shipbuilding Plant Lotos, JSC; Hexa-Lotos, LLC; Svoi, LLC; MedInTech, LLC; Atef-Russ, LLC; Marine Composite Shipbuilding, LLC; InProect, LLC; Protelux Lotоs, LLC; Stroyliderplus Lotоs, LLC; Helios Systems, LLC; Azka Composite, LLC; Naval Design International, LLC; Roza, LLC, etc. There have been offered the recommendations for the management company on developing a strategy for attracting residents and investors and establishing special preferential treatment for investment projects that are of strategic importance for the development of the regional economy and international cooperation are proposed.

Foreign Direct Investment and Special Economic Zones in Latvia

Abstract The paper aims at providing insight into the effectiveness of Latvian special economic zones (SEZ) as a tool to attract foreign direct investment (FDI). The goal is accomplished through the statistical analysis of relevant data and the comparison with international examples to establish a point of reference. Countries of comparison are chosen by merit, in the form of widely acknowledged success stories regarding SEZ policy, and relative statistical similarity. The wider the pool of examples, the more conclusions can be drawn about the effectiveness of SEZ in various metrics. Based on the results, Latvian special economic zones have significantly underperformed when compared to every single example on the list. Research has been approbated in the Riga Technical University 58th International Scientific Conference “Scientific Conference on Economics and Entrepreneurship” (SCEE’2017).

Comparative Analysis of Taxation for Special Economic Zones in Russia and APEC Economies

The article is devoted to the analysis of taxation of special economic zones, since special economic zones have become a center of attention in Russia over the latest decades. As objects for the study, the authors selected special economic zones in Russia and the countries participating in the Forum of the Asia-Pacific Economic Cooperation (APEC Forum).In the article the authors consider history, modern conditions and prospects for the development of special economic zones. The peculiarities of taxations on profits, organizations' property, transport, land, insurance contributions into the non-budget funds, as well as value-added taxation for the residents of the RF special economic zones are analyzed with regard to their types.The authors assess tax privileges and preferences for some taxes in the special economic zones in Russia and APEC member-countries are evaluated. The main problems of the taxation of the RF special economic zones are articulated together with the possible ways to solve them regarding the experience of APEC economies.As a result of the study, the authors concluded that to increase the effectiveness of special economic zones in Russia, it is necessary to expand the list of tax benefits to introduce a progressive scale of tax incentives, following the example of APEC countries and to improve legislation in the regulation of special economic zones.

Effectiveness of special economic zones of Poland

Special Economic Zones (SEZ) are economic enclaves, created by the state in order to attract domestic and foreign investors, so as to stimulate economic growth in the region. One of the models related to SEZ presenting the way of measuring the effectiveness of their impact on the surrounding economy is P. Warr’s enclave model (1983). The main purpose of the article is to verify the assumptions made in the original Warr model and adapt it to the economic conditions in transforming economy. Poland was chosen for the research because of excessive network of SEZs which influence Polish economy locally and create national and international economic relations. As a result of analysis of the effectiveness of SEZs in Poland, we conclude that the impact of SEZs on Polish economy is positive and additionally they are the source of value added for the market.

Do special economic zones induce developmental spillovers? Evidence from India’s states

Do special economic zones induce local development? Research drawing on the case of China’s special economic zones suggests that subnational polities can target the location of export zones in order to catalyze local and regional socioeconomic development. Since 2006, a number of Indian states have pushed forward similar zones in the face of accusations of land grabbing, arguing that the zones will be engines for improvement in exports, employment, and infrastructure. I argue that local development spillovers are an important, albeit previously understudied, dimension by which to evaluate the effects of special economic zones. I then present the first systematic analysis of the developmental effects of India’s SEZs, leveraging an original dataset on their locations, together with 2001 and 2011 census data containing a host of social and economic developmental variables. The findings show these SEZs have failed to bring about local socioeconomic development. To explain this absence of developmental spillovers, I provide a theoretical framework based on the crucial role of political economy incentive structures facing local politicians. I outline the mechanism through which Indian state politicians use state-owned development corporations for rent capture, undermining the potential effectiveness of SEZs and leading to their developmental failures. The combination of available means for extracting rents and the limited political constraints on such rent extraction leads to a lack of developmental spillovers. This framework can also help to explain the difference in the effects of SEZs in India and in China. These findings have theoretical importance for understanding the conditions under which subnational polities can use export zones and other export policies to catalyze development, and practical implications for understanding the mixed pattern of SEZ success across the world.

Do Special Economic Zones Induce Developmental Spillovers? Evidence from India's States

Do special economic zones induce local development? Research drawing on the case of China's special economic zones suggests that subnational polities can target the location of export zones in order to catalyze local and regional socioeconomic development. Since 2006, a number of Indian states have pushed forward similar zones in the face of accusations of land grabbing, arguing that the zones will be engines for improvement in exports, employment, and infrastructure. I argue that local development spillovers are an important, albeit previously understudied, dimension by which to evaluate the effects of special economic zones. I then present the first systematic analysis of the developmental effects of India's SEZs, leveraging an original dataset on their locations, together with 2001 and 2011 census data containing a host of social and economic developmental variables. The findings show these SEZs have failed to bring about local socioeconomic development. To explain this absence of developmental spillovers, I provide a theoretical framework based on the crucial role of political economy incentive structures facing local politicians. I outline the mechanism through which Indian state politicians use state-owned development corporations for rent capture, undermining the potential effectiveness of SEZs and leading to their developmental failures. The combination of available means for extracting rents and the limited political constraints on such rent extraction leads to a lack of developmental spillovers. This framework can also help to explain the difference in the effects of SEZs in India and in China. These findings have theoretical importance for understanding the conditions under which subnational polities can use export zones and other export policies to catalyze development, and practical implications for understanding the mixed pattern of SEZ success across the world.

The effects of special economic zones on employment and investment: a spatial panel modeling perspective

We estimate the set of panel and spatial panel data models of employment and investments for 379 Polish counties over the period 2003-2012. We take advantage of a unique firm-level dataset for Polish Special Economic Zones (SSEs), which includes about 30,000 observations. We find that SSEs have substantial positive effects on employment: jobs in a given SSE create jobs outside the SSE in hosting county and even more jobs in neighbouring counties. Effect of SSEs on investments is weaker, but still positive. Investments in a given SSE neither crowd out nor crowd in investments outside the SSE. Thereby, they add one to one to capital stock in hosting county. Our findings are robust to changes in estimation methods, sample composition, set of explanatory variables and spatial weight matrix.

Endogenous growth theory and regional performance: The moderating effects of special economic zones

Previous studies have explored regional performance from the perspective of endogenous growth theory. This empirical investigation is conducted on a panel dataset of 64 Vietnamese provinces and integrates moderated regression analysis. Statistically, the empirical results did not fully support the endogenous growth model in cases in which regional per capita income tended to converge across different regions, while improved foreign direct investment (FDI) inflow, capital investment, and degree of openness did have significant positive impacts on GDP growth. This study questions the validity of endogenous growth theory in the early stage of a less developed country. Furthermore, results indicate that internationalization activities positively affect regional performance for provinces that have established special economic zones (SEZs) through liberal state regulation.

Special Economic Zones as Growth and Anti-growth Poles as Exemplified by Polish Regions

Objective : The objective of this paper is to present the effects of special economic zones (SEZ) on the polarisation of public economic space in Polish regions. Research, Design & Methods : The paper looks at both positive and negative effects of economic zones on the polarization of economic space in Polish regions. In an empirical analysis of internal and external effects of SEZs growth centres are identified. Centre of the polarised region, as a source of development incentives, characterised with a higher growth dynamics in comparison to the other part of the region is identified as a growth pole; while the centre of a polarised region being a source of crisis factors higher than in the region is identified as an anti-growth pole. Findings: In the result of conducted studies 8 growth poles, 19 centres of unstable economic situation have been identified, anti-growth poles has not been identified. Factors that result in the polarisation as well as its positive and negative characteristics were identified. Implications & Recommendations: The new model, which captures growing changes and can activate an appropriate action aimed at avoiding crisis can be used as a potential early warning system by the authorities of territorial units. Contribution & Value Added: The originality of this work lies in proposing a new methodological approach to identify poles and anti-poles. This approach can be applied for various tiers of taxonomic division for regions in various countries and forms of public aid.

The Effects of Special Economic Zones on Employment and Investment: Spatial Panel Modelling Perspective

We estimate the set of panel and spatial panel data models of employment and investments for 379 Polish counties over the period 2003-2012. We take advantage of a unique firm-level dataset for Polish Special Economic Zones (SSEs), which includes about 30,000 observations. We find that SSEs have substantial positive effects on employment: jobs in a given SSE create jobs outside the SSE in hosting county and even more jobs in neighbouring counties. Effect of SSEs on investments is weaker, but still positive. Investments in a given SSE neither crowd out nor crowd in investments outside the SSE. Thereby, they add one to one to capital stock in hosting county. Our findings are robust to changes in estimation methods, sample composition, set of explanatory variables and selection of spatial weight matrix.

English

The aim of this study is to explain the principles of the creation, operation and analysis of the effects of special economic zones. Zones are a tool of regional policy, aiming at accelerating the economic development of disadvantaged areas. Attracting capital activates specific areas of the economy, allows beneficial transformations into its structure and allows for the creation of new jobs. One factor that influenced the development of special economic zones in Poland was country's accession to the European Union. Access to the common market, tax benefits and relatively low labor costs have led investors to undertake activities in the zones. Research which help to understand the impact of special economic zones on socio-economic development is important, useful in deciding whether to continue their functioning or not. Results can also be useful for practitioners of economic when it comes to making a decision about starting new business in the sphere.   Key words: Special economic zone, regional policy.