Free Trade Zone Research Articles

Pilot Free Trade Zone Establishment and New Firm Entry: Evidence from China

ABSTRACTThis article investigates the effect of pilot free trade zones (FTZs) on new firm entry. Using firm registration data in China from 2003 to 2020, we find that the establishment of FTZs has a significant and persistent positive impact on new firm entry, and it is attributed to the capital and talent agglomeration induced by FTZs. Heterogeneous analyses show that FTZs primarily stimulate the entry of firms in high‐tech industries and domestic private firms, and the effect of FTZs is more pronounced in prefectures with higher institutional innovation and those in coastal areas. Moreover, FTZs exhibit positive spillover effects on the emergence of new firms in surrounding regions, suggesting that the establishment of FTZs has empowered coordinated regional development.

Analysis of the Economic Growth Effect of the National Free Trade Port Zones

In the dynamic landscape of globalization, the pivotal role of free trade zones in catalyzing openness and international trade has gained unprecedented prominence, drawing keen governmental interest worldwide. As China deepens its commitment to reform and openness, it ambitiously outlined plans for the establishment of national pilot free trade zones and free trade ports in 2018. The grand vision was to set a gold standard for openness in the new era and bolster international competitiveness. A thorough review and analysis of existing literature on national free trade ports reveal compelling insights. Evidence strongly suggests that the construction of these ports has not only significantly propelled economic growth but also triggered a ripple effect across various sectors. Mechanistic dissection elucidates that this growth can be attributed to heightened foreign investment attraction and accelerated technological innovation. This paper contributes robust empirical evidence to the discourse on refining and advancing the construction of the free trade system, thereby offering valuable guidance for policymakers and practitioners alike.

Does the Construction of Free Trade Zones Promote the Development of the Digital Economy? Evidence from Chinese Prefecture-Level Cities

Does the Construction of Free Trade Zones Promote the Development of the Digital Economy? Evidence from Chinese Prefecture-Level Cities

A Study on Urban Development under the Policy of Inland Free Trade Zones

A Study on Urban Development under the Policy of Inland Free Trade Zones

Exploring the Impact of Institutional Innovation in Free Trade Zones and Free Trade Ports on Cultural Exchange and Soft Power Construction

This paper explores how institutional innovations in Free Trade Zones (FTZ) and Free Trade Ports (FTP) promote cultural exchange and soft power construction. Through a systematic literature review and policy analysis, it is found that institutional innovations in FTZs and FTPs, including relaxed restrictions on foreign investment in the cultural industry, streamlined approval processes for cultural exchange activities, the establishment of diverse cultural exchange platforms, and optimization of cultural talent introduction policies, effectively enhance the depth and breadth of international cultural exchange. These efforts have significantly improved China’s cultural soft power. A case study of the Hainan Free Trade Port demonstrates how proactive cultural policy innovations have led China to achieve notable success in international cultural exchanges, offering new ideas for global soft power competition. This study provides reference recommendations for future policy formulation and academic research, especially in optimizing cultural policies in FTZs and FTPs to further enhance cultural soft power.

Benefits and Vulnerabilities of the Free Trade Agreement for the EAEU Countries and China

Aim. Objective is to formulate the position of the EAEU in the negotiations on the free trade area with China.Tasks. We determine the potential results of the creation of the China-EAEU free trade area for each country.Methods. The indices of complementarity and trade intensity were calculated, and the benefits to society from the abolition of customs tariffs were calculated using a partial equilibrium trade-policy simulation.Results. The study of supply and demand for excavators showed that the total benefit of consumers (the construction industry) from the abolition of customs duties only slightly exceeds the losses of producers and the government. Based on the complementarity assessment, it was found that the free trade agreement is more beneficial for China than for the EAEU countries — the structure of China’s exports better corresponds to the structure of imports of the EAEU countries. It was revealed that the exports of the EAEU countries to China are not diversified, and the main export goods face minimal tariffs — 0% for crude oil from Russia and Kazakhstan, 3% for potash fertilizers from Belarus, 0% for ores and concentrates of precious metals from Kyrgyzstan, 0% for copper ores and concentrates from Armenia. The EAEU countries may be interested in further liberalization of trade with China due to the intention to export frozen fish, corn, wheat and rice (Russia), tobacco (Kyrgyzstan and Armenia), meat and dairy products (Belarus), and cognac (Armenia).Conclusions. Reduction of duties on the specified goods may be the subject of a preliminary temporary agreement. A free trade zone may be created by finalizing the existing Agreement on Trade and Economic Cooperation between the EAEU and its Member States and the PRC. It is recommended that, in addition to including provisions on the abolition of customs duties, sections on trade in services, investments, and movement of individuals be included.

The Impact of Free Trade Zones on Corporate Sustainability Performance: An Empirical Examination from the Dual Perspectives of Financial and Environmental Performance

As a “testing ground” for a new round of institutional innovation, China’s pilot free trade zones (FTZs) have created favorable development conditions for listed companies and significantly influenced their sustainability performance. Utilizing data from Shanghai and Shenzhen A-share listed companies from 2010 to 2022, this study uses the establishment of FTZs as a “quasi-natural experiment” and measures corporate sustainability performance by combining financial and environmental performance. A PSM-DID model is constructed to explore the impact of FTZ construction on corporate sustainability performance. The findings are as follows: (1) The establishment of FTZs significantly enhances both the financial and environmental performance of companies. (2) FTZs promote corporate sustainability performance by reducing transaction costs and improving corporate innovation levels. (3) The establishment of FTZs has a significantly positive impact on the sustainability performance of companies in highly competitive industries, non-labor-intensive industries, high-tech enterprises, and large-scale companies. This study reveals the impact and transmission mechanisms of FTZs on corporate sustainability performance, providing new empirical evidence for the future direction of corporate sustainable development in China.

Research on the Path of Further Deepening the Reform and Internationalization of English Education in the Hainan Free Trade Zone

With the establishment of the Hainan Free Trade Zone (FTZ), the internationalization of English education has become a key element of the region’s educational reform efforts. As globalization intensifies, fostering an internationalized English education system is crucial for improving the competitiveness and global positioning of the Hainan FTZ. This study explores the multiple pathways and strategies for promoting the internationalization of English education in the Hainan FTZ, focusing on aspects such as policy support, curriculum reform, teacher training, international collaboration, and the effective allocation of educational resources. By examining the current state of English education in the region, identifying key challenges, and drawing insights from successful domestic and international cases—particularly from free trade zones elsewhere—this paper offers actionable recommendations. These suggestions aim to enhance the region’s educational outcomes, thereby bolstering the Hainan FTZ’s broader objectives of economic growth and enhanced global connectivity. The proposed strategies also seek to elevate the international stature of the Hainan FTZ as a regional hub for talent development, international exchange, and soft power enhancement.

Assessing the evolution and perspectives of developing the russian export in current terms: adoption of the 4P model

The study’s relevance is caused due to the Russian export experiences, which acts as a research subject. Goal is to reveal current peculiarities of Russian export. As methodical tool the model of marketing mix was applied, which includes product, price, place, promotion. The analysis has shown: the Russian economy, to promote its export in new terms, uses marketing with new characteristics. The bigger are become the share in it of agricultural and metallurgical products, the share of developing countries among buyers. Promoting the export is provided including through the free trade zones of the Eurasian economic union with the third countries, common trade and cooperation areas with them. State support for import substitution assists to create the production able to export. Scientific contribution of the research results consists in that they expand application of micro-economic marketing mix model on export of national economy as a whole. The results received make possible to study in complex and simultaneously in detail the strengths and weaknesses of export, including the volume and structure of export, price dynamics, currency and financial, transport, trade and diplomatic peculiarities of sale.

Integration Projects and Institutional Matrices

In this paper, an attempt is made to understand the reasons for the formation of a particular order in a region based on the institutional approach. The connection between regional order and regional regulation with the type of institutional matrices of integrating countries is shown. It is established that when integrating social systems in order to mitigate possible institutional imbalances, institutions complementary to those dominant in the institutional matrix are used: when integrating X-matrix countries – market institutions and vice versa. The factors blocking regionalism in integration projects involving countries with institutional matrices of the same type include: the presence of one clearly expressed hegemon and its support of supranational regulatory bodies, the presence of federal rather than unitary states in the region. It has been established that for countries with different types of institutional matrix, convergence is possible (for example, cooperation in the security sphere, participation in the Free Trade Zone), but integration in this case will be limited to only certain areas that are of exceptional importance for social systems, with the prevalence of regionalization processes (integration “from below” without the creation of any significant and effective supranational bodies). Factors that hinder the development of both regionalism and regionalization are increasing political differences between countries, polarization along religious lines, manifestations of nationalism and racism.

Platform advantages or "policy trap" for neighbors? Export effects of establishing free trade zone in China: A quasi-natural experiment

As the important regional policy arrangements for China to implement a new round of opening-up strategy, the free trade zone (FTZ) policy have significant impacts on export trade. Based on the quasi-natural experiment of China's establishment of FTZs, the article evaluates the impact of the FTZs on enterprises' exports by using export data from Chinese Customs database and statistics of prefecture-level cities in China from 2007 to 2018. The analyses found that the FTZs has significantly promoted local exports. The FTZs has negative spatial externalities on export activities, which reduces the export performance of neighboring cities. The export effects of FTZs present continuous and dynamic characteristics. There is heterogeneity in the marginal impact of FTZs in different locations on the exports of enterprise. These findings provide empirical evidence for a more comprehensive understanding of the impact of the establishment of FTZs on enterprises' exports in the spatial dimension.

Estimates of the trade and global value chain (GVC) effects of China’s Pilot Free Trade Zones: a research based on the quantitative trade model

While Pilot Free Trade Zones (PFTZs) have been promoted in China as a unilateral opening measure to boost economic growth amid deglobalization, their benefits in driving cities’ openness remain an underexplored research topic. This study aims to investigate the impact of PFTZs on cities’ trade performance. By employing a multi-region and multi-sector general equilibrium analytical model, the study reveals that the PFTZs enhance the overall level of openness across all cities in the country. Regarding the value-added sources, the PFTZs reduce the proportion of value-added originating from domestic regions and increase the proportion derived from international markets. Moreover, the PFTZs play a pivotal role in stimulating exports and strengthening the Chinese cities’ participation in the Global Value Chain (GVC). Meanwhile, the PFTZs enhance cities’ upstreamness in GVC while exerting an inhibitory effect on the downstreamness in GVC for most cities.

Study on rapid policy-based strategic environmental assessment-taking China's regional development policy of Zhejiang Pilot Free Trade Zone as an example

Strategic Environmental Assessment(SEA) is acknowledged to be an important decision support tool. SEA concerns potential environmental impacts of decisions made by policy, plan and programs. At present, policy-based SEA is still in the exploratory stage in China. The development of policy-based SEA is extremely slow due to institutional and technical difficulties. In practice, the time from policy proposals to policy implementation is relatively short. So the corresponding policy-based SEA should reflect the characteristics of rapidity, centre on the seriously negative impact that may be caused policy implementation, and provide early and initial warnings.A simple and rapid framework was designed for policy-based SEA in this study. The framework includes four parts, namely, policy analysis, eco-environmental impact identification, eco-environmental sensitivity assessment, policy recommendations. Following this framework, regional development policy of Zhejiang Pilot Free Trade Zone (FTZ) was assessed. Results reveal that: 1)seriously negative environment impacts may arise from petroleum refining and chemical industry, oil and gas storage and transportation, iron ore transportation, liquid bulk commodities transportation. 2) Central Daishan area, Shengsi archipelago, Taohua Island, Liuheng island in Zhejiang FTZ is relatively of high eco-sensitivity, thus the fore-mentioned activities should be environmentally friendly or restricted in these areas. 3)In the future, continuous efforts should be made to promote sealing and automation of petroleum refining, chemical industry. Green petrochemical manufacturing technology utilization is recommended to reduce pollution from the source. Further, accelerating the construction of transportation pipelines is suggested in order to reduce air pollutants emissions caused by vehicle transportation activities. Fishery stock enhancement and releasing is recommended to counteract negative impact on fishery caused by iron and liquid bulk commodity marine transportation.

Can institutional opening-up promote green development in cities? Evidence from China's Pilot Free Trade Zones

As a testing ground for China's institutional opening-up, Pilot Free Trade Zones (PFTZs) are of great significance in shaping a new global economic governance framework, addressing pollution and carbon reduction challenges, and fostering green economic development and transition. This study empirically assesses the influence of PFTZs establishment on urban green development (GD) using panel data from 284 Chinese cities between 2007 and 2020, using the asymptotic Difference in Differences (DID) method. The results indicate that the creation of PFTZs greatly encourages cities to develop green sustainably. In comparison to cities without PFTZs, the presence of PFTZs results in a notable average increase of 9.5% in urban green total factor productivity (GTFP). The impact of PFTZs on urban GD varies significantly across different geographical areas and city resource endowment conditions. Institutional innovation has a positive moderating effect on the PFTZs' promotion of urban GD. The influence mechanisms that PFTZs support urban GD mainly include the effects of green innovation, economic agglomeration, and environmental regulation. This paper provides crucial policy insights for advancing PFTZ construction, promoting urban green growth, and ultimately achieving the coexistence of human beings and nature in harmony.

Steering toward sustainability: Can dual circulation development mitigate CO2 emissions? —Evidence from China

To reduce greenhouse gas emissions and achieve high-quality economic development, China has proposed another development pattern called dual circulation development (CIR), along with the goals of “carbon neutrality and carbon peaking”. Based on the data of prefecture-level cities and above from 2006 to 2021, the fixed-effects model, 2SLS model, mediation model, threshold model, and spatial Durbin model are used to discuss the role of CIR in affecting CO2 emissions. Results demonstrate that (1) the overall CO2 emissions exhibit a decreasing trend from 2006 to 2021, and the CIR presents an upward trend. CIR and CO2 emissions show apparent geographical differences. (2) CIR effectively reduces CO2 emissions, and this effect exhibits clear heterogeneity of different regions, resource endowment, and pilot free trade zone. CIR mitigates CO2 emissions by enhancing technological innovation and promoting human capital mobility. Market scale and industrial structure optimization act as a “magnifying glass”, amplifying the impact of CIR on reducing CO2 emissions. (3) The negative spatial spillover effect of CIR on CO2 emissions shows a “V” shape characterized by strengthening and then weakening in the range of 0–700 km. At this point, the 700 km mark represents the decay boundary. Findings suggest that the government should enhance the domestic market environment and improve the quality of foreign trade to fulfill the role of CIR in mitigating CO2 emissions. These empirical evidence and feasible measures are provided for some countries to reduce CO2 emissions while promoting economic development.

Spatio-temporal characteristics and multi-scenario simulation analysis of ecosystem service value in coastal wetland: A case study of the coastal zone of Hainan Island, China

Coastal wetland ecosystems harbor rich biodiversity and possess significant ecosystem service value (ESV). Therefore, it offers a range of crucial ecosystem services (ES) for human well-being and socio-economic development. Taking the Hainan Island coastal zone (HICZ) as a case study, the spatio-temporal characteristics of land use and land cover change (LULCC), and its associated ESV in wetland landscapes were analyzed over three time points (2000, 2010 and 2020). We explored the spatio-temporal evolution trajectory of ESV on the basis of geo-information tupu. Then, future land use simulation (FLUS) was employed to predict wetland patterns and ESV under three different scenarios: business as usual (BAU), ecological conservation first (ECF), and economic development first (EDF). The results showed that over the past two decades, a significant proportion (exceeding 80%) of the overall wetland region was comprised of offshore and coastal wetlands (OCW) as well as constructed wetlands (CW); these formed the matrix of the landscape. The area of building land (BL) continued to exhibit a consistent upward trend. Expanding by 2.18 times, it represented the most significant increase in the rate of dynamic changes in BL. The main ES in the HICZ corresponded to the regulation services (53.57%) and the support services (27.58%). The ESV of wetland losses accounted for 45.17% (43.08 × 108 yuan) of the total loss. The spatial differentiation of ESV in the HICZ was larger in the southwest and the northeast regions, while it was comparatively lower in the north. The transformation in the area of early and late change types accounted for 236.46 km2 and 356.69 km2, respectively. The scenario ECF was achieved with an optimal development of ESV (1807.72 × 108 yuan), which was coordinated with the high-level of development of regional ES functions and the economy. These findings provide valuable information for the sustainable development as well as the protection of ecology and environment of the coastal zone under the background of the construction of Hainan pilot free trade zone in the future.

Can the Founding of Free Trade Zones Lead to Financial Employment Boom? --Based on Multi-period Double-difference model

Can the Founding of Free Trade Zones Lead to Financial Employment Boom? --Based on Multi-period Double-difference model

ANALYSIS OF EXPORTS OF FIVE MAIN FISHERY PRODUCT COMMODITIES IN BATAM CITY USING THE MARKOV CHAIN MODEL

Indonesia, an archipelagic country, boasts significant potential in the fisheries sector, notably in the export of fishery products. Batam as a free trade zone plays a major role in Indonesia's fishery product exports. According to the Central Statistics Agency's data, there has been a 2.47% decline in fish and shrimp exports in January and February 2023 compared to January 2022. Therefore, further analysis is needed on projected exports of fishery products in Batam. This study focuses on the utilization of the Markov chain model to analyze the export dynamics of Batam City's primary fishery product commodities, including Seaweed, Fish, Shrimp, Crab, and Shellfish. Monthly export data for Batam City's fishery products throughout 2021-2023 sourced from The Ministry of Marine Affairs and Fisheries. Based on these data, the transition probability matrix will be calculated based on the number of export transitions below and above the Moving Average (MA 12) value. The Markov chain model for this case is an erdogic Markov chain model, in order that the limiting probability of the Markov chain model can be determined. The result shows that exports of fish, shrimp and crab in the long term will exceed the average export size in the past year each after 7 months, 11 months, and 14 months later respectively, while exports of seaweed and shellfish in the long term will be below the large average exports in the past year after 15 and 5 months. This research result offer valuable insights for the government to formulate strategies and policies concerning fishery product exports

Evaluating the Challenges and Prospects of Cross-Cultural Communication in Promoting Free Trade Zones in Nigeria

Free Trade Zones (FTZs) in Nigeria attract a diverse array of workers, businesses, and management teams from various cultural backgrounds. Effective communication within these environments is crucial for facilitating idea exchange, building trust, and maintaining relationships. With the expansion of global trade, the significance of cross-cultural communication in ensuring successful business interactions is paramount. However, the convergence of diverse cultural, linguistic, and business practices in Nigeria presents challenges that impede the optimal functioning of FTZs. This study delineates the challenges and prospects of cross-cultural communication in promoting investment in Nigerian FTZs. Using a qualitative approach, it employs in-depth interviews and document analysis to comprehensively explore these issues. Engaging stakeholders from different cultural backgrounds, the study identifies key communication challenges, including language barriers, stereotypes, ethnocentrism, and non-verbal communication differences. Despite these obstacles, implementing intercultural training programs and digital communication tools can enhance business interactions. This research contributes to international business, intercultural communication, and economic development discourse, offering insights for policymakers, business practitioners, and academics.

Research on the impact of China’s free trade zone policies on urban economic development

ABSTRACT The paper explores the impact of China’s free trade zone policies on urban economic development by way of the time-varying DID model using the annual panel data of 284 cities from 2010 to 2019. Through the study, it is found that the free trade zone policies have effectively promoted urban economic growth. Moreover, it is found that: (1) the pilot cities implementing free trade zone policies have registered economic growth via the mediating effect of foreign trade; (2) the free trade zone policies exert more obvious influential effect on eastern and coastal cities; (3) the relatively loose scope of free trade zones can more effectively promote the local urban economic development.