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What draws investment to special economic zones? Lessons from developing countries

Frick, Susanne and Rodríguez-Pose, Andrés ORCID: 0000-0002-8041-0856 (2023) What draws investment to special economic zones? Lessons from developing countries. Regional Studies, 57 (11). 2136 - 2147. ISSN 0034-3404

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Identification Number: 10.1080/00343404.2023.2185218

Abstract

Special Economic Zones (SEZs) are a popular policy tool for the promotion of economic development. However, questions remain about their economic contribution and about what aspects of SEZ policies are most relevant to investors. This article sheds light on these issues by comparing SEZs across Africa, Asia and Latin America. We find that, while investment decisions by foreign companies are driven by market access, political stability and low labour costs, adequate SEZ policies facilitate the attraction of investment. A good industrial infrastructure together with a strategic location and service provision within the zones draw investment. Fiscal incentives, by contrast, have a limited influence on investment decisions.

Item Type: Article
Official URL: https://www.tandfonline.com/journals/cres20
Additional Information: © 2023 The Authors
Divisions: Geography & Environment
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
JEL classification: F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy; Factor Movement Policy; Foreign Exchange Policy
L - Industrial Organization > L5 - Regulation and Industrial Policy > L52 - Industrial Policy; Sectoral Planning Methods
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
Date Deposited: 06 Feb 2023 17:00
Last Modified: 26 May 2024 16:24
URI: http://eprints.lse.ac.uk/id/eprint/118117

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