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Towards economically dynamic Special Economic Zones in emerging countries

Frick, Susanne A., Rodríguez-Pose, Andrés ORCID: 0000-0002-8041-0856 and Wong, Michael D. (2019) Towards economically dynamic Special Economic Zones in emerging countries. Economic Geography, 95 (1). 30 - 64. ISSN 0013-0095

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Identification Number: 10.1080/00130095.2018.1467732

Abstract

Despite a massive recent proliferation of Special Economic Zones (SEZs), there is virtually no quantitative research on what drives their dynamism. The aim of this paper is to address this gap and analyse the factors influencing SEZ performance – proxied by economic growth – in emerging countries. The paper relies on two novel datasets, using night-lights data to proxy for SEZ performance and containing a wide range of SEZ policy variables and characteristics across a large number of countries. The main results of the analysis indicate that a) zone growth is difficult to sustain over time; that b) trying to upgrade the technological component or value-added of the economy through SEZ policies is often challenging; and that c) zone size matters: larger zones have an advantage in terms of growth potential. Furthermore, country context significantly determines SEZ performance. Firms look for low cost locations, but in close proximity to large cities. Proximity to large markets as well as pre-existing industrialization also increase SEZ performance. In contrast, incentives and other program specific variables are highly context-specific and not structurally correlated with SEZ performance.

Item Type: Article
Official URL: https://www.tandfonline.com/toc/recg20/current
Additional Information: © 2018 Clark University
Divisions: Geography & Environment
Subjects: H Social Sciences > HB Economic Theory
JEL classification: 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
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy; Factor Movement Policy; Foreign Exchange Policy
Sets: Departments > Geography and Environment
Date Deposited: 20 Apr 2018 09:35
Last Modified: 20 Jul 2021 01:49
URI: http://eprints.lse.ac.uk/id/eprint/87585

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