 From fields to factories: Special economic zones, foreign direct investment, and labour markets in VietnamTevin Tafese, Jann Lay and Van Tran Journal of Development Economics, 2025, vol. 174, issue C Abstract: Vietnam's deep integration into GVCs has been driven by the establishment of special economic zones (SEZs). This paper examines the local labour market impacts of this SEZ programme. We trace the built-up area of SEZs over time to construct a novel continuous measure of SEZ exposure using historical satellite imagery. In a difference-in-differences design with continuous treatment, we examine the impact of SEZ exposure on local labour market outcomes at the district-level for the period 2009–2019. We find that the expansion of SEZs has led to a rapid shift in employment from own-account and family work in agriculture to manufacturing in foreign firms. We also show that SEZ exposure leads to higher wages and more formal employment contracts. Earnings improvements are not confined to workers in foreign manufacturing firms, but spill over to workers in household businesses and domestic firms. The effects on women account for most of these impacts. Keywords: Vietnam; Special economic zones; Foreign direct investment; Labour markets; Structural change; Informality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:174:y:2025:i:c:s0304387825000185 DOI: 10.1016/j.jdeveco.2025.103467 Access Statistics for this article Journal of Development Economics is currently edited by M. R. Rosenzweig More articles in Journal of Development Economics from Elsevier |
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