Impact Of Special Economic Zones Research Articles

Measuring The Impact of Special Economic Zone (SEZ) Arun Lhokseumawe on the Sustainability of its Peripheral Area

The impact of special economic zones (SEZ) on the sustainability of their peripheral areas is rarely measured and discussed. This research was conducted to determine the sustainability level of the Arun Lhokseumawe SEZ generated to its surrounding area before and after the exhaustion of its natural gas resources. The statistical matching method and the Moran index used for the analysis involved 14 sustainability variables representing social, economic, and environmental dimensions. The method used includes building the sustainability index using village level data, statistical matching to find evidence of impact, and determination of the Moran index to describe its spatial patterns. Additionally, the index was used to describe the policy implication based on the current SEZ sustainability level. The results show that there is no upward trend in the sustainability index after three years of operation, except for an increase in the SEZ (inside) in 2018 which then declines again in 2021. This figure is lower than before natural gas depletion. It was found that, in 2008, the spatial pattern of the high sustainability index mainly spread to areas outside the Arun Lhokseumawe industrial area. Meanwhile, in 2021, the spatial pattern of a high sustainability index clustered near the Arun Lhokseumawe special economic zone.

The impact of special economic zones on structural change

The staggered enactment of special economic zones (SEZ) laws in the last three decades provides us with a unique opportunity to identify the causal impact of place-based policies on structural change. Using difference-in-differences and event studies, we provide new evidence that SEZs have a causal impact on structural change and industrialization. We find that adopting an SEZ policy increased the GDP share of industry and decreased the shares of the agriculture and service sectors. We disentangle these effects by examining the heterogeneities by income groups and geographic regions. We find that SEZ policies have been positive and significant for industrial growth in Asia and Latin America, while having no significant effect for African countries. Overall, this study represents one of the first efforts to identify the causal impact of SEZs using a large panel dataset of more than 126 countries for 1995–2018.

The socioeconomic impact of Special Economic Zones: Evidence from Cambodia

AbstractThis study examines the socioeconomic impact of Special Economic Zones (SEZs) in Cambodia—a prominent place‐based policy established in 2005. The paper employs a database on existing and future SEZs in Cambodia with matched household surveys at the district level and documents stylized facts on SEZs in a low‐income country setting. To identify the causal effects of the SEZ program, the paper (i) constructs an alternative control group including future SEZ program participants and districts adjacent to SEZ hosts; and (ii) employs a propensity score weighting technique. The study finds that entry of SEZs increases employment and leads to a decline in income inequality at a district level. Gains in female employment is the key channel explaining rising employment rates. The paper also finds that school drop‐out rates are higher in districts with clusters of multiple SEZs.

Special economic zones of Kazakhstan as a tool to stimulate economic growth

This article is devoted to the study of the role of special economic zones (SEZ) in Kazakhstan as an effective tool for stimulating economic growth. The article analyzes the experience of functioning of special economic zones in Kazakhstan, reveals their main characteristics and advantages. The main attention is paid to the economic and social effects achieved through the creation and development of such zones. The impact of SEZs on industrial development, innovation activity, unemployment reduction and promotion of technological progress in the country is considered.

A Comparative Analysis of the Japanese Overseas SEZ in Phnom Penh and the Chinese Overseas SEZ in Sihanoukville, Cambodia: from the Perspective of Porter’s Diamond Model

This study focuses on the development and influence of special economic zones (SEZs), examining factors such as enterprise competitiveness, main industries, supply chain relationships, and the development environment of the zones. The lack of a consistent framework for assessing the performance and impact of SEZs has been a challenge in research. To address this, the paper employs Porterʼs Diamond Model to analyze the factors that contribute to the development and influence of SEZs, suggesting that this model can serve as a comprehensive framework for future SEZ research. The existing research on SEZs in developing countries is found to be inadequate. However, the SEZs established in Cambodia through collaborations with China and Japan have played a significant role in the countryʼs rapid economic growth. By examining two specific cases — the Japanese-invested Phnom Penh SEZ and the Chinese-invested Sihanoukville SEZ — this study identifies common operational challenges faced by developing countries in establishing SEZs. Furthermore, by exploring different collaboration models and assessing the impacts on local communities, this research offers valuable insights for policymakers and international investors in their decision-making processes.

Assessment of the impact of industrial-type special economic zones on the socio-economic development of regions

The relevance of the topic is related to the study and assessment of the impact of industrial-type special economic zones on the socio-economic development of regions. Industrial-production zones are territories with an area of up to 40 square kilometers located in economically developed regions of the state with a large number of industrial–production enterprises, experienced workers with high qualifications, natural resources and developed transport infrastructure. This is part of the state customs territory, where certain types of products are produced, and investors carry out their activities on preferential terms, which affects the development of the country's economy. The main purpose of the work is to study the types of special economic zones in the Russian Federation, to analyze the activities of special economic zones of the industrial and production type of the Russian Federation, as well as to assess the impact of special economic zones on the socio-economic development of regions. The analysis includes the main indicators and trends determining the effectiveness of the functioning of industrial-type special economic zones operating on the territory of the Russian Federation. The main conclusions of the study are that for the Russian Federation, the creation and further deployment of effective activities of special economic zones is important in order to solve acute strategic tasks, spatial development of the country and reduce inequality in the socio-economic development of regions, therefore, 8 new zones were created in 2022. As of 2023, there are 25 zones in Russia, besides 6 new zones are being created. The role of special economic zones in regional development is significant: economic diversification, localization of foreign capital, production of import-substituting goods, creation of new jobs, development of competition.

The economic impact of special economic zones: Evidence from Thailand

The economic impact of special economic zones: Evidence from Thailand

Special economic zones: Econometric assessment of effects and development prospects

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.

Impact of Special Economic Zones on domestic market: Evidence from Russia

ABSTRACT Place-based policies can be an effective instrument for governments to encourage the economic development of a country. A Special Economic Zone (SEZ) is a place-based policy aimed at attracting FDI, employment growth, and supporting new economic reforms. In addition, for emerging economies an SEZ could be a potential catalyst for development; foreign investors can have a drastic impact on the productivity of domestic firms, revenues, and market shares through the implementation of new technologies and the creation of new firms. However, the effects of SEZs on the domestic market at the firm level are largely understudied. In this research, I leverage the large-scale SEZ policy implemented by the Russian government in 2005 that aims to attract foreign investors to specific parts of the country by offering tax relief. The primary objective of this research is to quantify the effects of the Russian SEZ policy on local firms. To examine the effects, I use the generalised Difference-in-Difference methodology and apply it to a panel of firms in Russia for the 2006–2019 period. The data includes time-varying SEZ treatment on firms, firm characteristics, and accounting data. The primary outcome variables of interest are revenues, profits, and total factor productivity. The research findings could contribute to the urban economic literature on place-based policies and may be helpful to policymakers in determining the effectiveness of SEZ place-based policies.

40 years of economic reform - the case of Pudong new area open economic zone in Shanghai

ABSTRACT This paper investigates the impact of special economic zones (SEZs) on economic growth. We use the Pudong New Area Open Economic Zone in Shanghai for our comparative case study and find this policy tool to have added up to CNY 7,166 to GDP per capita compared to a synthetic counterfactual without such a policy. Given that different reform policies were undertaken in different provinces including Shanghai itself even before the launch of the Pudong New Area Open Economic Zone, our findings might be considered conservative.

Assessing the impact of special economic zones on regional growth through a comparison among EU countries

ABSTRACT The establishment of incentive zones represents a cluster policy approach that a country can implement to boost economic growth. Being influenced by regional characteristics, the success of specific incentive types (special economic zones, free-trade zones, free zones) may vary considerably. By using a new composite indicator, differently designed according to each type of development plan, this study analyses 51 European incentive zones so as to identify best practices. Moreover, propensity score matching allows the net impact of the industrial policy to be assessed. The findings show significant positive results achieved by the various industrial policy instruments with differing levels of success.

Can the Special Economic Zones Promote the Green Technology Innovation of Enterprises? An Evidence From China

Addressing global climate change is the responsibility of all mankind, and original green technology innovation is the key to achieving the goal of “carbon neutrality”. Under the target of “carbon neutrality”, it remains to be seen whether China’s special economic zones can promote the green technology innovation of enterprises, which is very important for achieving green and high-quality development. This study examines the impact of special economic zones (SEZs) on enterprises’ green technology innovation by constructing a quasi-natural experiment using data of Chinese listed companies (collected from 2000 to 2017) and green patent applications. The empirical results showed that the SEZ program significantly promoted the green technology innovation of enterprises. The number of green patent applications of enterprises in zones has increased by 17.02%. The promotion effect was more significant on enterprises in provincial development zones, those that are owned by the central state, and those in central and eastern regions. In the short term, the green innovation promotion effect is mainly derived from the effect of preferential policy subsidies, while in the long run, the role of the agglomeration effect gradually emerged. This study provides empirical evidence for green and high-quality development. This study also provides a new policy reference for achieving a win–win situation between industrial agglomeration and ecological environment.

Special economic zones, export status, and firms’ productivity: Theory and evidence from China

AbstractThis paper explores the impact of special economic zones (SEZs) policy and export status on firms’ productivity. We first sketch a theoretical model to explain the selection mechanism of different types of exporters and SEZ firms, and provide the productivity ranking of firms. SEZ’s exporters have the highest productivity. Firms facing high imported intermediate tariffs will select themselves into SEZs to avoid imported input tariffs; firms become non‐SEZ’s exporters when their intermediate inputs tariffs are low. Compared with other types of firms, non‐SEZ’s non‐exporters have the lowest productivity. Then, we empirically test the productivity ranking by firm‐level data, and the results are consistent with our theoretical framework. Besides, different SEZ policies are associated with heterogeneous impacts on the firms’ productivity. Our paper further suggests that preferential policies are responsible for the productivity ranking of firms.

Research of special economic zones in the context of sustainable development of regions

The article is devoted to the problems of development of special economic zones in the context of sustainable development of regions. An important role in the context of sustainable development of Russian regions is undoubtedly played by spatial structures, which are special economic zones that form the basis of the country’s innovation infrastructure. These structures can be considered both as a result of the process of sustainable development and as a factor that strengthens these processes and, thus, have traditionally been a driver of growth for decades. SEZs activate investment activity, often lead to economic diversification, and cause positive socio-economic transformations. These are unique growth points with priority knowledge-intensive high-tech industries that give impulses for renewal to other territories. The main function of the special economic zones is to promote the sustainable development of the territories in the border areas and to project its influence from the center to the periphery. This also affects the aggregate potential that determines the development of production (mainly in combination with production cooperation) and the prospects for the transformation of relations between territories. The mechanism for distributing the impact of special economic zones on the surrounding territory is based on the potential of the region. An important element of solving this problem is the creation of an innovative infrastructure through the development of special economic zones and the creation of conditions for innovative activities.

The special economic zones and innovation: Evidence from China

We examine the impact of Special Economic Zones (SEZs) on innovation using China's county-level data from 1985 to 2011. Results show that the establishment of SEZs promotes a county's innovation in terms of application, grant and citation numbers of patents by 15%–25%, 8%–22% and 15%–25%, respectively. The promoting effect of establishing high-tech SEZs is higher than that of establishing economic and technological SEZs. Compared with provincial SEZs, national SEZs have a greater effect on innovation. Counties with universities nearby apply for more patents. The SEZs not only promote innovation in existing technical fields, but also continuously expand new research fields. The SEZs promote innovation by providing tax credits, technological subsidies and attracting more enterprises.

The Impact of Special Economic Zones (SEZs) on Economic Growth: Where the Absorption Capacity of Domestic Labor Stands?

This study designs to assess and infer the effect of Special Economic Zones under China-Pakistan Economic Corridor on the economic growth of Pakistan through technological spillovers and the absorption capacity of domestic laborers. The present study develops a theoretical model and an empirical panel model to test whether the intervention of Special Economic Zones in the Asian developing countries has affected their economic growth through domestic Human Capital. For relevant results, we have employed the GMM model for the panel data set. The results indicate that the technological enhancement accumulates the economy through various other selected indicators rather than domestic labor productivity. The human capital remains inconsequent in this nexus. This condition gives us guidelines to follow pro-human capital policies to accumulate domestic human capital before the intervention from the foreign firms on our soil. Subsequently, much waited for dynamic or long-run benefits in terms of human capital can be attained rather than static effects.JEL Classification: C23, D24, J24How to Cite:Waqar, S., Badshah, I., Bandeali, M. S. M., & Ahmed, S. (2021). The Impact of Special Economic Zones (SEZs) on Economic Growth: Where the Absorption Capacity of Domestic Labor Stands?. Etikonomi, 20(2), xx – xx. https://doi.org/10.15408/etk.v20i2.19386.

SPECIAL ECONOMIC ZONES: THE IMPACT AND IMPLICATIONS ON ECONOMIC ROWTH WITH REFERENCE TO THE CHINESE MODEL

The subject of the research is related to the analysis of the impact of special economic zones on the economic growth of countries that have applied the aforementioned concept of economic development, with reference to the Chinese model. The research goals are to provide the scientific and expert public with an overview of the mechanism of special economic zones and the implications on targeted macroeconomic parameters. The research was conducted by analyzing the relevant literature, the method of deduction and quantification of the impact of special economic zones on economic growth. The research will provide an answer to the research problem that is sublimated in the question: Do special economic zones stimulate economic growth of the national economy and how? The results of the research will show that there is a strong relationship and a degree of determination between special economic zones and targeted macroeconomic parameters. This will confirm the basic hypothesis that special economic zones have a significant impact on sustainable and inclusive economic growth of the national economy ceteris paribus as well as the access to high technology, innovations and know-how.

Impact of special economic zones on firm performance

The establishment of special economic zones (SEZs) is one of the critical policies to promote economic growth. However, the relationship between SEZs and firm performance is still unclear. Using China Industrial Enterprise Database (CIED) from 1998 to 2007, this paper investigates the influence of firm location on its performance mainly from two channels: selection effect and agglomeration effect. The results suggest that firms in SEZs have better performance on average than firms outside SEZs. One reason for the productivity effect is selecting firms with higher productivity to enter the zone and firms with lower productivity to exit the zone. Agglomeration is another critical channel, and the effects are heterogeneous. Both firms in the zones and firms outside the zones gain spillovers from the zones, with the former being larger than the latter. Firms gain larger agglomeration effects from a cluster of the same industry than across industries.

SEZs and poverty reduction: evidence from Andhra Pradesh, India

PurposeThe present study evaluates the impact of special economic zones (SEZs) on poverty, both rural and urban with special reference to Andhra Pradesh in India, using household consumption expenditure data. In addition to estimating the effects of the SEZs on poverty, the authors explore some of the possible mechanisms generating these effects.Design/methodology/approachThe authors apply a difference-in-differences (DID) technique on a pooled, cross-sectional, district-level dataset based on official annual household surveys for the period from 2001 to 2012 to estimate the average effects of SEZs on household expenditure per capita, a commonly used measure of household poverty.FindingsThe establishment of the SEZs constituted a major exogenous shock to rural economies by creating demand for large chunks of land, which had an immediate impact on the economic and social settings of these economies and aggravated rural poverty. However, over time the poverty aggravating effects of SEZs in rural areas dampened. The effects of SEZs on urban poverty are found to be different from those on rural poverty. It is also revealed that the districts with multiple SEZs experienced larger effects than those with only one or two SEZs. Overall, the SEZs did have positive expenditure effects, but this transition might have been accompanied by heightened inequality between the rural and urban areas.Research limitations/implicationsFirst, the authors did not have access to village or municipal-level consumption data. It is therefore assumed here that district level performance is a reliable proxy for the relevant impacts of SEZ operations. Second, panel data, which would allow more precise measurement of effects than the pooled cross section data used in this study, are not available. Third, the authors’ econometric analysis is essentially comparative statics in nature and does not capture possible spillover dynamics, issues of relocation of economic activity, or migration.Practical implicationsFirst, land acquisition is likely to emerge as a major political and social challenge for the localities that host SEZs. For effective policy implementation, it is necessary to establish legal institutions to address this challenge. Second, governments in developing countries often announce new SEZ programmes on a very large scale and insist that they be implemented over short periods of time. The authors recommend that the government should adopt an experimental approach in implementing the policy. Third, the authors provide evidence that in the long run, effects of SEZs hinge on the success of SEZs in attracting investment and generating additional employment. The policy must therefore be informed by rigorous analysis of the potential of SEZs in the country, as well as alternative policy options.Social implicationsThe authors’ results show that large-scale land acquisitions to implement large industrial projects are likely to result in shocks to the rural economy exacerbating rural-urban inequalities: village communities lose their resource base, are marginalised in the process, and, as a result, face economic deprivations. It may lead to severe economic, social and political consequences. The authors’ study implies that any strategy for large-scale industrialisation should take cognisance of its effects on the affected communities and should be designed to include strategies to improve their economic opportunities and to ensure social inclusion.Originality/valueSEZs are one of the most controversial topics within development policy discourse. Their regional development effects are subject to intense debate. Yet, there is surprisingly little systematic evaluation to inform the debate and to guide policymakers. This is one of the earliest studies to assess the poverty effects of SEZs and is the first for India, using household consumption data.

The impact of Special Economic Zones on local labour markets in Poland

Abstract Studies conducted so far suggest that SEZs are not treated by local authorities as the main mechanism of job creation in a given region. The objective of this paper is to highlight potential mechanisms through which SEZs impact labour markets in poviats (counties) in Poland. To this end we conducted a comparative analysis of changes that had taken place in the labour market over the period 2004–2016 in two groups of poviats with the highest unemployment rate reported in 2004: with and without SEZs. The study does not allow us to unambiguously conclude that SEZs contributed to the improvement of labour market situation in poviats with the highest unemployment rate in Poland. That can be attributed to the fact that SEZs in Poland are highly fragmented as well as to SEZs investors being able to select locations for their investment projects in relatively better developed regions.