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Comparative Analysis of the Effectiveness of Special Economic Zones and Their Influence on the Development of Territories

Author

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  • Olga Sinenko

    (Far Eastern Federal University, Vladivostok, Suhanova Street, Yekaterinburg, Russia)

  • Igor Mayburov

    (Far Eastern Federal University, Ural Federal University Named after the first President of Russia B.N. Yeltsin, 19, Mira Street, Yekaterinburg 620002, Russia.)

Abstract

One of the key issues of the functioning of special economic zones (hereinafter SEZ) is the effect that the tax incentives they offer has on the state and their home areas. The purpose of this article is to perform a comparative analysis of SEZ of industrial type that won the global free zones of the Year 2015 awards. By summarizing China's experience of conducting a comprehensive evaluation of SEZs' effectiveness we were able to identify the main methods that are used for evaluating the effectiveness of SEZs. To perform the analysis, we use financial indicators such as direct investment, revenue shortfalls because of tax incentives, direct financial subsidies as well as indicators that reflect the impact of SEZs on the development of their home territories: People's income, employment, gross domestic product. The article presents a comparative analysis of the impact of SEZs on the development of their home territories using the case of the leader zones in the following regions: Europe - Alabuga SEZ, Republic of Tatarstan (Russia); Central and Eastern Europe - Katowice SEZ, Poland, Latin America and Caribbean - Zona Franca Santiago, Dominican Republic. The results of the analysis prove that the SEZs have a positive effect on the development of their home territories, for example, by driving up direct foreign investment and GPD per capita. At the same time, SEZs have no influence on the size of the population and the unemployment rate there

Suggested Citation

  • Olga Sinenko & Igor Mayburov, 2017. "Comparative Analysis of the Effectiveness of Special Economic Zones and Their Influence on the Development of Territories," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 115-122.
    • Handle: RePEc:eco:journ1:2017-01-17
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    References listed on IDEAS

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    1. Alexander Klemm & Stefan Parys, 2012. "Empirical evidence on the effects of tax incentives," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(3), pages 393-423, June.
    2. Givord, Pauline & Quantin, Simon & Trevien, Corentin, 2018. "A long-term evaluation of the first generation of French urban enterprise zones," Journal of Urban Economics, Elsevier, vol. 105(C), pages 149-161.
    3. Manzano, Osmel & Auguste, Sebastián & Alfaro, Laura & Artana, Daniel & Taylhardat, Adolfo & Cuevas, Mario & Porto, Luis, 2015. "Partners or Creditors? Attracting Foreign Investment and Productive Development to Central America and Dominican Republic," IDB Publications (Books), Inter-American Development Bank, number 6820.
    4. Jed Kolko & David Neumark, 2010. "Do some enterprise zones create jobs?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(1), pages 5-38.
    5. Osmel Manzano & Sebastián Auguste & Laura Alfaro & Daniel Artana & Adolfo Taylhardat & Mario Cuevas & Luis Porto, 2015. "Partners or Creditors? Attracting Foreign Investment and Productive Development to Central America and Dominican Republic," IDB Publications (Books), Inter-American Development Bank, number 88273 edited by Sebastián Auguste & Mario Cuevas & Osmel Manzano, February.
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    Cited by:

    1. Beata Ślusarczyk & Katarzyna Grondys, 2018. "The Concept of Sustainable Development in the Functioning of Municipalities Belonging to Special Economic Zones in Poland," Sustainability, MDPI, vol. 10(7), pages 1-20, June.
    2. Cornelius Dube & Wellington Matsika & Gamuchirai Chiwunze, 2020. "Special economic zones in Southern Africa: Is success influenced by design attributes?," WIDER Working Paper Series wp-2020-61, World Institute for Development Economic Research (UNU-WIDER).
    3. Elena Matushevskaya, 2018. "An Integrated Approach to Evaluating the Effectiveness of Functioning of Free Economic Zone," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(3), pages 870-883.
    4. Roseline T. Karambakuwa & Ronney M. Ncwadi & Weliswa Matekenya & Leward Jeke & Syden Mishi, 2020. "Special economic zones and transnational zones as tools for Southern Africa's growth: Lessons from international best practices," WIDER Working Paper Series wp-2020-170, World Institute for Development Economic Research (UNU-WIDER).
    5. Maria O. Kakaulina & Dmitry R. Gorlov, 2022. "Assessment of the Impact of Tax Incentives on Investment Activity in Special Economic Zones of the Russian Federation," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 21(2), pages 282-324.

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    More about this item

    Keywords

    Special Economic Zones; Tax Incentives; The Effectiveness of Tax Incentives;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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