Do Place-Based Policies Work? Micro-Level Evidence from China's Economic Zone Program

47 Pages Posted: 26 Jul 2015

See all articles by Yi Lu

Yi Lu

National University of Singapore (NUS) - Department of Economics

Jin Wang

Hong Kong University of Science & Technology (HKUST)

Lianming Zhu

Kyoto University

Date Written: July 3, 2015

Abstract

Exploiting two geo-coded firm censuses, this paper examines the impact of China's Special Economic Zones on economic activity in the targeted areas. We find that economic zones have a positive effect on employment, output and capital, and increase the number of firms. We also find that firm births and deaths play a larger role in explaining the zones' effects than incumbents and relocations. Finally, a zone's effectiveness depends on a program's features. Capital-intensive industries exhibit larger positive zone effects than labor-intensive ones. Location characteristics such as market potential and transportation accessibility are not critical factors in enhancing the program effects.

Keywords: Place-based Policies; Relocation; Market Potential; Special Economic Zones

JEL Classification: H2, J2, O2, R3

Suggested Citation

Lu, Yi and Wang, Jin and Zhu, Lianming, Do Place-Based Policies Work? Micro-Level Evidence from China's Economic Zone Program (July 3, 2015). Available at SSRN: https://ssrn.com/abstract=2635851 or http://dx.doi.org/10.2139/ssrn.2635851

Yi Lu (Contact Author)

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore
65-65166834 (Phone)

HOME PAGE: http://ylu6.weebly.com

Jin Wang

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong

Lianming Zhu

Kyoto University ( email )

Yoshida-Honmachi
Sakyo-ku
Kyoto, 606-8501
Japan

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