IDEAS home Printed from https://ideas.repec.org/a/taf/rjapxx/v20y2015i3p489-516.html
   My bibliography  Save this article

Does development zone have spillover effect in China?

Author

Listed:
  • Deming Luo
  • Yanjun Liu
  • Yiyun Wu
  • Xiwei Zhu
  • Xiangrong Jin

Abstract

We construct a new database of spatial relations between industrial firms and development zones using the Application Programming Interface addressing and document the development zones' spillover effect on firms' total factor productivity (TFP). Development zones significantly improve the TFP of surrounding firms, which attenuates with the distance from a development zone, and increases with the density of development zones in a given area. The spillover effect of national development zones decays more sharply than that of provincial ones. The rectification project improves firms' TFP and the spillover effect of development zones. The establishment of development zones affects surrounding firms' TFP, where TFP of newly entered firms decreases in the short term but soon rises rapidly.

Suggested Citation

  • Deming Luo & Yanjun Liu & Yiyun Wu & Xiwei Zhu & Xiangrong Jin, 2015. "Does development zone have spillover effect in China?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 20(3), pages 489-516, July.
    • Handle: RePEc:taf:rjapxx:v:20:y:2015:i:3:p:489-516
    DOI: 10.1080/13547860.2015.1054171
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13547860.2015.1054171
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13547860.2015.1054171?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Patrick Kline & Enrico Moretti, 2014. "People, Places, and Public Policy: Some Simple Welfare Economics of Local Economic Development Programs," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 629-662, August.
    2. Chen, Maggie Xiaoyang & Moore, Michael O., 2010. "Location decision of heterogeneous multinational firms," Journal of International Economics, Elsevier, vol. 80(2), pages 188-199, March.
    3. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2012. "Do unemployed workers benefit from enterprise zones? The French experience," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 881-892.
    4. Moretti, Enrico & Wilson, Daniel J., 2014. "State incentives for innovation, star scientists and jobs: Evidence from biotech," Journal of Urban Economics, Elsevier, vol. 79(C), pages 20-38.
    5. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117, Elsevier.
    6. Fujita, Masahisa & Mori, Tomoya, 1997. "Structural stability and evolution of urban systems," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 399-442, August.
    7. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
    8. Hansen, Christian B., 2007. "Generalized least squares inference in panel and multilevel models with serial correlation and fixed effects," Journal of Econometrics, Elsevier, vol. 140(2), pages 670-694, October.
    9. Carlino, Gerald A. & Chatterjee, Satyajit & Hunt, Robert M., 2007. "Urban density and the rate of invention," Journal of Urban Economics, Elsevier, vol. 61(3), pages 389-419, May.
    10. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    11. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    12. Wang, Jin, 2013. "The economic impact of Special Economic Zones: Evidence from Chinese municipalities," Journal of Development Economics, Elsevier, vol. 101(C), pages 133-147.
    13. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    14. Matias Busso & Jesse Gregory & Patrick Kline, 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," American Economic Review, American Economic Association, vol. 103(2), pages 897-947, April.
    15. Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
    16. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    17. Ham, John C. & Swenson, Charles & İmrohoroğlu, Ayşe & Song, Heonjae, 2011. "Government programs can improve local labor markets: Evidence from State Enterprise Zones, Federal Empowerment Zones and Federal Enterprise Community," Journal of Public Economics, Elsevier, vol. 95(7), pages 779-797.
    18. Simon Alder & Lin Shao & Fabrizio Zilibotti, 2012. "The Effect of Economic Reform and Industrial Policy in a Panel of Chinese Cities," DEGIT Conference Papers c017_061, DEGIT, Dynamics, Economic Growth, and International Trade.
    19. De Loecker, Jan, 2007. "Do exports generate higher productivity? Evidence from Slovenia," Journal of International Economics, Elsevier, vol. 73(1), pages 69-98, September.
    20. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    21. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhou Taidong & Iftikhar Ahmad, 2020. "Special Economic Zones in Pakistan: Promises and Perils," PIDE Research Report 2020:1, Pakistan Institute of Development Economics.
    2. Xiwei Zhu & Ye Liu & Ming He & Deming Luo & Yiyun Wu, 2019. "Entrepreneurship and industrial clusters: evidence from China industrial census," Small Business Economics, Springer, vol. 52(3), pages 595-616, March.
    3. Zheng, Shilin & Li, Zhaochen, 2020. "Pilot governance and the rise of China's innovation," China Economic Review, Elsevier, vol. 63(C).
    4. Lu, Xinhai & Chen, Danling & Kuang, Bing & Zhang, Chaozheng & Cheng, Chen, 2020. "Is high-tech zone a policy trap or a growth drive? Insights from the perspective of urban land use efficiency," Land Use Policy, Elsevier, vol. 95(C).
    5. Yanjing Zhang & Zhengguo Su & Guan Li & Yuefei Zhuo & Zhongguo Xu, 2018. "Spatial-Temporal Evolution of Sustainable Urbanization Development: A Perspective of the Coupling Coordination Development Based on Population, Industry, and Built-Up Land Spatial Agglomeration," Sustainability, MDPI, vol. 10(6), pages 1-20, May.
    6. Lingfan Yang & Xiaolong Luo & Ziyao Ding & Xiaoman Liu & Zongni Gu, 2022. "Restructuring for Growth in Development Zones, China: A Systematic Literature and Policy Review (1984–2022)," Land, MDPI, vol. 11(7), pages 1-32, June.
    7. Shuang Gao & Jingwen Zhang & Xiaoqing Mo & Rong Wu, 2021. "Dynamic Evolution of the Operating Efficiency of Development Zones in China," Sustainability, MDPI, vol. 13(18), pages 1-13, September.
    8. Peerasit Kamnuansilpa & Andrey Timofeev & Grichawat Lowatcharin & Sirisak Laochankham & Vissanu Zumitzavan & Panpun Ronghanam & Krisada Prachumrasee & Narongdet Mahasirikul, 2023. "Local economic development in Thailand," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 1852-1873, October.
    9. Jingjing Chen & Han Feng & Hong Zhou, 2022. "Local industrial policy and productivity: Evidence from China," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 138-161, January.
    10. Bin Wu & Xuefei Xu & Zhenzhong Feng, 2018. "Investment Promotion, Fiscal Competition and Economic Growth Sustainability," Sustainability, MDPI, vol. 10(1), pages 1-12, January.
    11. Wang, Keqiang & Li, Guoxiang & Liu, Hongmei, 2021. "Porter effect test for construction land reduction," Land Use Policy, Elsevier, vol. 103(C).
    12. Li, Cunfang & Li, Danping & Dong, Mei, 2019. "The spillage effect of the transfer behavior of coal resource-exhausted enterprises and science and technology projects," Resources Policy, Elsevier, vol. 62(C), pages 385-396.
    13. Jingyi Tian & Jun Nagayasu, 2023. "Financial Systemic Risk behind Artificial Intelligence:Evidence from China," TUPD Discussion Papers 44, Graduate School of Economics and Management, Tohoku University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jia, Junxue & Ma, Guangrong & Qin, Cong & Wang, Liyan, 2020. "Place-based policies, state-led industrialisation, and regional development: Evidence from China's Great Western Development Programme," European Economic Review, Elsevier, vol. 123(C).
    2. Neumark, David & Simpson, Helen, 2015. "Place-Based Policies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1197-1287, Elsevier.
    3. Simon Alder & Lin Shao & Fabrizio Zilibotti, 2016. "Economic reforms and industrial policy in a panel of Chinese cities," Journal of Economic Growth, Springer, vol. 21(4), pages 305-349, December.
    4. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    5. Hsu, Wen-Tai & Lu, Yi & Luo, Xuan & Zhu, Lianming, 2023. "Foreign direct investment and industrial agglomeration: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 610-639.
    6. Ito, Banri & Xu, Zhaoyuan & Yashiro, Naomitsu, 2015. "Does agglomeration promote internationalization of Chinese firms?," China Economic Review, Elsevier, vol. 34(C), pages 109-121.
    7. Patrick Kline & Enrico Moretti, 2014. "People, Places, and Public Policy: Some Simple Welfare Economics of Local Economic Development Programs," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 629-662, August.
    8. Yang Yang, 2018. "Transport Infrastructure, City Productivity Growth and Sectoral Reallocation: Evidence from China," IMF Working Papers 2018/276, International Monetary Fund.
    9. Sun, Churen & Yu, Zhihao & Zhang, Tao, 2012. "Agglomeration and Trade with Heterogeneous Firms," MPRA Paper 49001, University Library of Munich, Germany, revised 17 Aug 2013.
    10. Gabriella Berloffa & Eleonora Matteazzi & Alina Şandor & Paola Villa, 2019. "The quality of employment in the early labour market experience of young Europeans," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(6), pages 1549-1575.
    11. Dai, Xiaoyong & Zhao, Zhiqi, 2021. "Can exporting resolve overcapacity? Evidence from Chinese steel companies," Economic Modelling, Elsevier, vol. 102(C).
    12. Weinstein, Russell, 2018. "Dynamic responses to labor demand shocks: Evidence from the financial industry in Delaware," Journal of Urban Economics, Elsevier, vol. 106(C), pages 27-45.
    13. Marco Bee & Maria Michela Dickson & Flavio Santi, 2018. "Likelihood-based risk estimation for variance-gamma models," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 27(1), pages 69-89, March.
    14. Binkai Chen & Ming Lu & Christopher Timmins & Kuanhu Xiang, 2019. "Spatial Misallocation: Evaluating Place-Based Policies Using a Natural Experiment in China," NBER Working Papers 26148, National Bureau of Economic Research, Inc.
    15. Muraközy, Balázs & Telegdy, Álmos, 2023. "The effects of EU-funded enterprise grants on firms and workers," Journal of Comparative Economics, Elsevier, vol. 51(1), pages 216-234.
    16. Görg, Holger & Mulyukova, Alina, 2022. "Place-Based Policies and Agglomeration Economies: Firm-Level Evidence from Special Economic Zones in India," IZA Discussion Papers 15123, Institute of Labor Economics (IZA).
    17. Ehrl, Philipp, 2013. "Agglomeration economies with consistent productivity estimates," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 751-763.
    18. Rudai Yang & Canfei He, 2014. "The productivity puzzle of Chinese exporters: Perspectives of local protection and spillover effects," Papers in Regional Science, Wiley Blackwell, vol. 93(2), pages 367-384, June.
    19. Tan, Yong & Lin, Faqin & Hu, Cui, 2016. "How continuing exporters set the price? Theory and empirical evidence from China," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 91-102.
    20. Bin, Peng & Chen, Xiaolan & Fracasso, Andrea & Tomasi, Chiara, 2018. "Resource allocation and productivity across provinces in China," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 103-113.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjapxx:v:20:y:2015:i:3:p:489-516. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjap .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.