Place‐Based Policies, Firm Productivity, and Displacement Effects: Evidence from Shenzhen, China

27 Pages Posted: 6 Mar 2019

See all articles by Hans Koster

Hans Koster

Vrije Universiteit Amsterdam, School of Business and Economics

Fang Fang Cheng

Utrecht University

Michiel Gerritse

Tinbergen Institute

Frank G. van Oort

University of Utrecht

Date Written: March 2019

Abstract

Developing and transitional countries devote considerable funds to selected areas to stimulate local growth and firm productivity. We examine the impact of place‐based interventions due to the opening of science parks in Shenzhen, China, on firm productivity and factor use. Our identification strategy, exploiting spatial and temporal differencing in firm‐level data, addresses the issues that (a) the selection of science park locations is not random and (b) high‐productivity firms sort themselves into science parks. Firm productivity is approximately 15–25% higher due to the science park policy. The policy also increases local wages and leads to distortions due to job displacement.

Keywords: place‐based policies, productivity, science parks, transitional economies

Suggested Citation

Koster, Hans and Cheng, Fang Fang and Gerritse, Michiel and van Oort, Frank, Place‐Based Policies, Firm Productivity, and Displacement Effects: Evidence from Shenzhen, China (March 2019). Journal of Regional Science, Vol. 59, Issue 2, pp. 187-213, 2019, Available at SSRN: https://ssrn.com/abstract=3346010 or http://dx.doi.org/10.1111/jors.12415

Hans Koster (Contact Author)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Fang Fang Cheng

Utrecht University

Vredenburg 138
Utrecht, 3511 BG
Netherlands

Michiel Gerritse

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Frank Van Oort

University of Utrecht ( email )

Vredenburg 138
NL-3508 TC Utrecht, 3511 BG
Netherlands

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
93
PlumX Metrics