Place-based Policies, Firm Productivity and Displacement Effects: Evidence from Shenzhen, China

Hans Koster, Fang Fang Cheng, Michiel Gerritse and Frank Oort
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Fang Fang Cheng: Utrecht University, the Netherlands

No 16-021/VIII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We analyse the economic impacts of place-based policies that aim to enhance economic development by stimulating growth and productivity of firms in designated areas. We use unique panel data from China with information on manufacturing firms’ production factors, productivity and location, and we exploit temporal and spatial variation in place-based interventions due to the opening of science parks in the metropolitan area of Shenzhen. The identification strategy enables us to address the issues that (i) science parks are located in favourable locations and that (ii) high-productivity firms sort themselves in science parks. We find that productivity is approximately 15-25 per cent higher due to the policies. The results also show that local wages have increased in science parks. Weaker evidence suggests that displacement effects are sizeable.

Keywords: place-based policies; transitional economies; science parks; productivity (search for similar items in EconPapers)
JEL-codes: H2 R3 R5 (search for similar items in EconPapers)
Date: 2016-04-01
New Economics Papers: this item is included in nep-cna, nep-geo, nep-pr~, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Place‐based policies, firm productivity, and displacement effects: Evidence from Shenzhen, China (2019)
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