Place-Based Policies, Creation, and Agglomeration Economies: Evidence from China's Economic Zone Program

Yi Lu, Jin Wang and Lianming Zhu

American Economic Journal: Economic Policy, 2019, vol. 11, issue 3, 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.

JEL-codes: O16 O18 O25 P25 R23 R32 R58 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pol.20160272
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Citations: View citations in EconPapers (114)

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