Fostering Enterprise Innovation: The Impact of China’s Pilot Free Trade Zones

Ting Lei and Ping Xie ()
Additional contact information
Ting Lei: Shandong University of Finance and Economics
Ping Xie: Yantai Institute of Technology

Journal of the Knowledge Economy, 2024, vol. 15, issue 3, No 19, 10412-10441

Abstract: Abstract In the ever-changing global landscape, economic development opportunities arise from novel circumstances. Economic globalization and the rapid internationalization of enterprises are promoting international economic growth. Concurrently, domestic economies transition from high-speed growth to superior-quality growth. Amidst this complexity, innovation emerges as a catalyst for enhancing enterprise quality and global competitiveness. China’s pilot free trade zones (FTZs), established in 2013, serve as experimental platforms to drive policy experimentation, attract foreign investment, and streamline cross-border trade. This study examines the impact of these zones on enterprise innovation using patent application data from China’s A-share listed companies between 2011 and 2020. While existing research often focuses on macroeconomic FTZ impacts, this study explores microeconomic implications on individual enterprises. Using Shanghai and Shenzhen A-share listed companies, a multi-period difference-in-differences method is employed to explore the influence of FTZ establishment on innovation output. The findings reveal that FTZs enhance enterprise innovation output, with heterogeneity across technology-intensive and state-owned enterprises. Financial constraints are identified as a mechanism linking FTZs to innovation. Theoretical implications emphasize the positive correlation between FTZs and innovation output, highlighting policy-driven incentives. Heterogeneity insights offer tailored interventions for diverse enterprise profiles. The study enriches innovation understanding, contributing to policy formulation. Managerial implications underscore FTZs’ dynamic catalyst role in enterprise innovation. Recommendations are offered for policymakers and practitioners to leverage FTZs for fostering innovation and economic growth. Ideas for future research suggest longitudinal analyses, global comparisons, and in-depth policy mechanism exploration. As the world economy evolves, FTZs emerge as key players in shaping innovation trajectories.

Keywords: Pilot city of free trade zone of China; Enterprise innovation; Patent application (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s13132-023-01501-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jknowl:v:15:y:2024:i:3:d:10.1007_s13132-023-01501-8

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13132

DOI: 10.1007/s13132-023-01501-8

Access Statistics for this article

Journal of the Knowledge Economy is currently edited by Elias G. Carayannis

More articles in Journal of the Knowledge Economy from Springer, Portland International Center for Management of Engineering and Technology (PICMET)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().