The impact of pilot free trade zones on producer services agglomeration

Jizeng Peng, Jiaojiao Ling and Defang Yuan

Applied Economics, 2026, vol. 58, issue 2, 262-276

Abstract: Pilot Free Trade Zones (PFTZs) are essential tools that stabilize foreign trade and promote industrial transformation and upgrading. This study utilizes panel data from 284 cities in China between 2003 and 2019 to explore the impact of PFTZ on producer services agglomeration. The findings reveal that PFTZs significantly promote producer services agglomeration and regional industrial upgrading. Regarding mechanisms, PFTZs accelerate regional informatization, expand opening-up, and enhance technological innovation, which in turn drive producer services agglomeration and industrial upgrading. Heterogeneity analysis reveals that PFTZs significantly impact producer services agglomeration in coastal cities, with a pronounced effect on high-end producer services agglomeration. This study provides empirical evidence that PFTZs facilitate producer services agglomeration, industrial restructuring, and regional coordinated development.

Date: 2026
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DOI: 10.1080/00036846.2025.2452534

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