What draws investment to Special Economic Zones? Lessons from developing countries

Susanne Frick and Rodríguez-Pose, Andrés
Authors registered in the RePEc Author Service: Andrés Rodríguez-Pose

No 17977, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Special Economic Zones (SEZs) are a popular policy tool for the promotion of economic development. However, questions remain about their economic contribution and about what aspects of SEZ policies are most relevant to investors. This article sheds light on these issues by comparing SEZs across Africa, Asia and Latin America. We find that, while investment decisions by foreign companies are driven by market access, political stability and low labour costs, adequate SEZ policies facilitate the attraction of investment. A good industrial infrastructure together with a strategic location and service provision within the zones draw investment. Fiscal incentives, by contrast, have a limited influence on investment decisions.

JEL-codes: F21 L52 O14 O24 (search for similar items in EconPapers)
Date: 2023-03
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Working Paper: What draws investment to Special Economic Zones? Lessons from developing countries (2023)
Working Paper: What draws investment to special economic zones? Lessons from developing countries (2023)
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