Special economic zones: Econometric assessment of effects and development prospects

Abstract

Introduction. The article examines the efficiency of special economic zones and their impact on economic growth and investments. Various special economic zones have been organized in many countries over the past decades, but an overview of the international literature concerning their impact on regional development gives unclear conclusions about their long-term efficiency. The demand for the most productive tools of state support of the economy in uncertain times, prolonged stagnation and transformation processes unfolding at the turn of the decades can explain the relevance of the paper.

Purpose. The purpose of the study is to evaluate the efficiency of special economic zones as a tool for faster development of the regions in the Russian Federation. The key idea of the paper is to develop and justify an econometric model aimed to assess the impact of special economic zones on the regional development. This econometric model is supposed to give reliable conclusions about the introduction of these zones as public units of regional development.

Materials and Methods. Theoretically and methodologically, the paper comes from the theories and approaches taken from institutional and regional economies. The key methods are the natural experiment and the difference-in-difference method which estimate the average effect from special economic zones on the gross regional product, investments, and employment with due regard to the overall economic growth dynamics in the country and the displacement effect caused by self-selection. The primary 2010–2020 Rosstat figures were analyzed.

Results. It has been reliably proven and national practices show that special economic zones produce an adverse effect primarily on the gross regional product per capita and the average annual employment rate.

Conclusion. The proposed model represents a novel approach in the studies. Together with the economic theory, the findings the model gave support the demand for a customized state-implemented tool for its intervention in the economic development of different territories and could persuade the authorities to adjust their approaches in practice. Further studies could be focused on finding public regulatory tools tailored for specific territories and conditions.

Keywords: special economic zone, SEZ efficiency, development institutions, efficiency of development tools, efficiency of development institutions, impact assessment, evidence-based policy, econometric models, difference-in-difference method, natural experiment

For citation

Rakhmeeva I. I., Chesnyukova L. K. Special economic zones: Econometric assessment of effects and development prospects. Perm University Herald. Economy, 2023, vol. 18, no. 1, pp. 5–24. DOI 10.17072/1994-9960-2023-1-5-24

References

1. Koshcheev D. A., Miroliubova T. V. Assessing region and industrial cluster mutual influence: System and spatial approach. Perm University Herald. Economy, 2022, vol. 17, no. 2, pp. 161–184. (In Russian). https://doi.org/10.17072/1994-9960-2022-2-161-184
2. Bukharova M. M., Andreev A. N., Bodod'ko R. F., Gulyaeva D. A., Zverkov V. I., Kravchenko E. I., Labudin M. A, Mal'bakhov M. K., Novikova A. R., Seregin M. S., Surov V. A., Shpilenko A. V. Biznes-navigator po osobym ekonomicheskim zonam Rossii – 2021, issue 5. Moscow, 2021. 265 p. (In Russian).
3. Goncharenko V. E., Korobova V. F. Evaluation of the development unevenness of the Russian Federation regions by socio-economic resource components. Statistics and Economics, 2019, no. 4, pp. 54–72. (In Russian). https://doi.org/10.21686/2500-3925-2019-4-54-72
4. Panskov V. G. Special economic zones: Results and development prospects. ETAP: Economic Theory, Analysis, and Practice, 2018, no. 6, pp. 39–53. (In Russian). https://doi.org/10.24411/2071-6435-2018-10057
5. Aggarwal A. Special economic zones: Revisiting the policy debate. Economic and Political Weekly, 2006, vol. 41, no. 43/44, pp. 4533–4536. Available at: http://www.jstor.org/stable/4418855 (accessed 10.02.2022).
6. Akinci G., Crittle J. Special economic zone: Performance, lessons learned, and implication for zone development (English). Foreign Investment Advisory Service (FIAS) occasional paper. Washington, World Bank, 2008. 83 p.
7. Basile R., Castellani D., Zanfei A. Location choices of multinational firms in Europe: The role of national boundaries and EU policy. University of Urbino, Economics, Mathematics & Statistics Working Paper No. 78.2003; Centro Studi Luca d’Agliano Development Studies Working Papers. 34 p. https://dx.doi.org/10.2139/ssrn.455040
8. Bidwai P. India: Special economic zones, path to massive land grab. National Interest vs People’s Interest: A space for social movements and citizens initiatives, 2006, pp. 22–25.
9. Gibbon P. (Ed.) Export Processing Zones as an economic development strategy. Danish Institute for International Studies study for Danish Foreign Ministry, 2008. 35 p.
10. Narula R., Zhan J. X. Using special economic zones to facilitate development: Policy implications. Transnational Corporations, 2019, vol. 26, iss. 2, pp. 1–26. https://doi.org/10.18356/72e19b3c-en
11. Gabriel A. V. Las Zonas Económicas Especiales de la República Popular China: Rol del Estado y desarrollo de Clusters High-Tech. Santiago de Chile, 2020. 50 p.
12. Farole T., Akinci G. Special economic zones: Progress, emerging challenges, and future directions. The World Bank, 2011. 21 p.
13. Acemoglu D., Johnson S., Robinson J. Institutions as the Fundamental Cause of Long-Run Growth. Working Paper 10481. Cambridge, NBER, 2004. 111 p. https://doi.org/10.3386/w10481
14. Leksin V. N., Shvetsov A. N. Obshchegosudarstvennaya sistema strategicheskogo planirovaniya territorial'nogo razvitiya. Trudy Instituta sistemnogo analiza Rossiiskoi akademii nauk, 2006, vol. 22, pp. 192–212. (In Russian).
15. Klimanov V.V., Ivasko E. V., Korotkikh A. M. A practice of introducing the territorial approach to the system of public administration in the Russian Federation. Region: Economics and Sociology, 2017, no. 1 (93), pp. 3–21. (In Russian). https://doi.org/10.15372/ REG20170101
16. Glaz'ev S. Yu., Granberg A. G. Obosnovanie gosudarstvennoi regional'noi politiki v Rossii: otchet o NIR «Strategicheskie napravleniya territorial'nogo razvitiya Rossii» (zaklyuchitel'nyi). Moscow, 2010. 49 p. (In Russian).
17. Adigamova F. F., Andreeva M. Yu., Balandina A. S. Osobye ekonomicheskie zony. Zarubezhnyi i otechestvennyi opyt: monografiya. Moscow, 2017. 287 p. (In Russian).
18. Golubkin I. V., Bukharova M. M., Danilov L., Zverkov V., Labudin M. Russian Special Economic Zones: Business Navigator 2018. Moscow, Association for the Development of Clusters and Technology Parks in Russia, 2019. 148 p.
19. Frumina S. V. Special economic zones: Theoretical treatment. Introduction. Finance and Credit, 2019, vol. 25, iss. 1, pp. 39–54. (In Russian). https://doi.org/10.24891/fc.25.1.39
20. Popov V. R. Special economic zones as a management instrument of innovation and industrial development of the region’s economy. Colloquium-journal, 2019, 2 (26), pp. 49–56. (In Russian).
21. Morkovkin D. E. Modern tools of spatial regulation of accelerated socio-economic development of Russia. Municipal Academy, 2017, 2, pp. 25–36. (In Russian).
22. Sukharev O. S., Ilyina O. B. The analysis of the regional economic system of the type special economic zone using the method of structural changes. Economy of Regions, 2012, no. 3, pp. 249–260. (In Russian). https://doi.org/10.17059/2012-3-25
23. Sukharev O. S. Institutsional'naya teoriya ekonomicheskogo rosta: doklad. Мoscow, Institut ekonomiki RAN Publ., 2015. 44 p. (In Russian).
24. Sukharev O. S. Ekonomicheskii rost i restrukturizatsiya: teoreticheskie kriterii i modeli upravleniya. Journal of Economy and Entrepreneurship, 2015, vol. 9, no. 8-1, pp. 100–113. (In Russian).
25. Popov E. V., Kats I. S. Institutional peculiarities of public welfare sector evolution. Vestnik UGTU–UPI. Seriya ekonomika i upravlenie, 2009, no. 5, pp. 4–18. (In Russian).
26. Yiming Internal Causes for Shenzhen’s Industrial Development and Structural Evolution: An Explanation from the Perspective of Institutional Change. Studies on China’s Special Economic Zones 2. Research Series on the Chinese Dream and China’s Development Path, 2019, pp. 11–22. https://doi.org/10.1007/978-981-13-6675-8_2
27. Yiming Y., Lei H. The Poverty Reduction Effect of China’s Special Economic Zones – Case Study of Shenzhen. Studies on China’s Special Economic Zones 3. Research Series on the Chinese Dream and China’s development Path, 2020, pp. 1–20. http://dx.doi.org/10.1007/978-981-13-9841-4_1
28. Robinson Industrial Policy and Development. Harvard, Harvard University, 2009. 31 p.
29. Qinghe L., Fang W., Zhenfeng Z., Xiao K. A Study of Special Economic Zone Transformation and the China Model. Studies on China’s Special Economic Zones, Research Series on the Chinese Dream and China’s Development Path, 2017, pp. 65–90. http://dx.doi.org/10.1007/978-981-10-3704-7_6
30. Farole T., Moberg L. It worked in China, so why not in Africa? The political economy challenge of Special Economic Zones. WIDER Working Paper 2014/152. Helsinki, UNU-WIDER, 2014. 21 p. https://doi.org/10.35188/UNU-WIDER/2014/873-5
31. Huang J. Report on the Development of the Shantou Special Economic Zone. Annual Report on the Development of China’s Special Economic Zones, 2019, pp. 131–140. https://doi.org/10.1007/978-981-13-9837-7_9
32. Mukherjee A., Pal P., Deb S., Ray S., Goyal T. M. Special Economic Zones in India: Status, Issues and Potential. New Delhi, Springer, 2016. 254 p. https://doi.org/10.1007/978-81-322-2806-6
33. Yitao T., Zhiguo L. Special Economic Zones and China’s Development Path. Singapore, Springer, 2018. 277 p. https://doi.org/10.1007/978-981-10-3220-2
34. Wu F., Ma Z. Report on the Development of the Shenzhen Special Economic Zone. Annual Report on the Development of China’s Special Economic Zones. Blue Book of China’s Special Economic Zones, 2018, pp. 93–111. https://doi.org/10.1007/978-981-13-9837-7_7
35. Auzan А., Satarov G. The priorities of the institutional reforms in economic modernization. Voprosy Ekonomiki, 2012, no. 6, pp. 65–73. (In Russian). https://doi.org/10.32609/0042-8736-2012-6-65-73
36. Sukharev O. S. Teoriya effektivnosti ekonomiki: organizatsionnyi, institutsional'nyi i sistemnyi rakurs problemy. Journal of Economy and Entrepreneurship, 2010, 6 (17), pp. 5–17. (In Russian).
37. Avdasheva S. B., Korneeva D. V. Competition policy in export-oriented markets: Whether remedies are really effective? HSE Economic Journal, 2016, vol. 20, 3, pp. 442–470. (In Russian).
38. Tukhtarova E. Kh. Natural experiments in economics. Human Progress, 2022, vol. 8, iss. 3, pp. 10. (In Russian). https://doi.org/10.34709/IM.183.10
39. Shagas N. L., Roshchina Ya. A., Kochergin A. V., Kartaev F. S., Budanova M. M., Kotlobovskii I. B., Lukash E. N., Dobronravova E. P., Chakhoyan V. A., Babaskin S. Ya., Nikitin S. A., Petreneva E. A., Lugachev M. I., Skripkin K. G., Lipuntsov Yu. P. Matematicheskie i instrumental'nye metody v sovremennykh ekonomicheskikh issledovaniyakh. Moscow, 2018. 232 p. (In Russian).
40. Ashenfelter O., Card D. Using the longitudinal structure of earnings to estimate the effect of training programs. The Review of Economics and Statistics, 1985, vol. 67, no. 4, pp. 648–660. https://doi.org/10.2307/1924810
41. Card D., Krueger A. B. Minimum wages and employment: A case study of the fast food industry in New Jersey and Pennsylvania. American Economic Review, 1994, vol. 84, no. 4, pp. 772–793.
42. Shvetsov A. N. “Points of growth” or “black holes”? (Concerning application effectiveness of “zonal tools for government boosting of territories’ economic dynamics). Russian Economic Journal, 2016, 3, pp. 40–61. (In Russian).
43. Kuznetsova O. V. Scientific and technological priorities in the federal spatial development policy in Russia. Federalism, 2022, vol. 27, no. 4 (108), pp. 5–20. (In Russian). https://doi.org/10.21686/2073-1051-2022-4-5-20
44. Andreeva E. N., Zaionchkovskaya Zh. A., Kuznetsova O. V. Leksin V. N., Lyubovnyi V. Ya., Skatershchikova E. E., Ushakov A. K., Shvetsov A. N. Strategiya dlya Rossii: novoe osvoenie Sibiri i Dal'nego Vostoka. Ch. 1. Moscow, Sovet po vneshnei i oboronnoi politike Publ., 2001. 73 p. (In Russian).
45. Klimanov V. V., Kazakova S. М. Features of strategic planning for the development of the Russian Far East at the federal level. Regional'nye issledovaniya, 2022, no. 1 (75), pp. 68–79. (In Russian). https://doi.org/10.5922/1994-5280-2022-1-6
46. Shvetsov A. N. Russian space in the process of historical transitions (towards the development and implementation of the theory of post-Soviet system transformations of the organization of the socio-economic space). Russian Economic Journal, 2021, no. 6, pp. 66–100. (In Russian). https://doi.org/10.33983/ 0130-9757-2021-6-66-100

Show full text