Place-Based Policies, Creation, and Agglomeration Economies: Evidence from China's Economic Zone Program
- (pp. 325-60)
Abstract
Combining rich firm and administrative data, this paper examines the incidence and effectiveness of a prominent place-based policy in China: special economic zones. Establishing zones is found to have had a positive effect on capital investment, employment, output, productivity, and wages, and to have increased the number of firms in the designated areas. Net entry plays a larger role in generating those effects than incumbents. The special zone program's net benefits over three years are estimated to amount to about US$15.62 billion. Capital-intensive industries benefit more than labor-intensive ones from the zone programs.Citation
Lu, Yi, Jin Wang, and Lianming Zhu. 2019. "Place-Based Policies, Creation, and Agglomeration Economies: Evidence from China's Economic Zone Program." American Economic Journal: Economic Policy, 11 (3): 325-60. DOI: 10.1257/pol.20160272Additional Materials
JEL Classification
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O25 Industrial Policy
- P25 Socialist Systems and Transitional Economies: Urban, Rural, and Regional Economics
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R32 Other Spatial Production and Pricing Analysis
- R58 Regional Development Planning and Policy
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