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Benefit-Cost Appraisals of Export Processing Zones: A Survey of the Literature

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  • Kankesu Jayanthakumaran

    (University of Wollongong, New South Wales, Australia)

Abstract

This article surveys research on the performance of Export Processing Zones (EPZs) using a benefit-cost analytical framework. Results suggest that zones in South Korea, Malaysia, Sri Lanka, China and Indonesia are economically efficient and generate returns well above estimated opportunity costs. On the other hand, the heavy infrastructure costs involved in setting up the zone in the Philippines resulted in a negative net present value. The zones have been an important source of employment in all cases and have promoted local entrepreneurs in some. However, as industrial development proceeds, the gap between the market and opportunity costs of labour narrows and the interest in EPZs tends to disappear. It may hold only if the zones generate private profit to domestic shareholders. Copyright Overseas Development Institute, 2003.

Suggested Citation

  • Kankesu Jayanthakumaran, 2003. "Benefit-Cost Appraisals of Export Processing Zones: A Survey of the Literature," Development Policy Review, Overseas Development Institute, vol. 21(1), pages 51-65, January.
  • Handle: RePEc:bla:devpol:v:21:y:2003:i:1:p:51-65
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    Citations

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    Cited by:

    1. Hausmann, Ricardo & Obach, Juan & Santos, Miquel Angel, 2016. "Special Economic Zones in Panama: A Critical Assessment," Working Paper Series rwp16-044, Harvard University, John F. Kennedy School of Government.
    2. Ricardo Hausmann & Juan Obach & Miguel Angel Santos, 2016. "Special Economic Zones in Panama: Technology Spillovers from a Labor Market Perspective," CID Working Papers 326, Center for International Development at Harvard University.
    3. Zhang, Xiaobo, 2016. "Building effective clusters and industrial parks," IFPRI discussion papers 1590, International Food Policy Research Institute (IFPRI).
    4. repec:eee:riibaf:v:42:y:2017:i:c:p:1150-1163 is not listed on IDEAS
    5. Cling, Jean-Pierre & Razafindrakoto, Mireille & Roubaud, Francois, 2005. "Export processing zones in Madagascar: a success story under threat?," World Development, Elsevier, vol. 33(5), pages 785-803, May.
    6. Walkenhorst, Peter & Malouche, Mariem, 2006. "Trade Policy and Export Performance in Morocco," MPRA Paper 23119, University Library of Munich, Germany.
    7. Jean-Pierre Cling & Mireille Razafindrakoto & François Roubaud, 2007. "Export Processing Zones in Madagascar: the impact of the dismantling of clothing quotas on employment and labour standards," Working Papers DT/2007/06, DIAL (Développement, Institutions et Mondialisation).
    8. Douglas Zhihua Zeng, 2016. "Global Experiences of Special Economic Zones with Focus on China and Africa: Policy Insights," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-27, October.
    9. Farole, Thomas & Moberg, Lotta, 2014. "It worked in China, so why not in Africa? The political economy challenge of Special Economic Zones," WIDER Working Paper Series 152, World Institute for Development Economic Research (UNU-WIDER).
    10. Walkenhorst, Peter & Cattaneo, Olivier, 2006. "Trade, Diversification and Growth in Nigeria," MPRA Paper 23735, University Library of Munich, Germany.
    11. Jayanthakumaran, Kankesu & Lee, Shao-Wei, 2007. "An initial push for successful transition from import substitution to export-orientation in Taiwan and China: The FDI-led hypothesis," Economics Working Papers wp07-03, School of Economics, University of Wollongong, NSW, Australia.
    12. Tantri, Malini L., 2014. "Promises and paradoxes of SEZs expansion in India," Working Papers 331, Institute for Social and Economic Change, Bangalore.
    13. Peerally, Jahan Ara & Cantwell, John A, 2012. "Changes in Trade Policies and the Heterogeneity of Domestic and Multinational Firms’ Strategic Response: The Effects on Firm-Level Capabilities," World Development, Elsevier, vol. 40(3), pages 469-485.
    14. Kalim Shah & Jorge Rivera, 2008. "Export processing zones and corporate environmental performance in emerging economies: The case of the oil, gas, and chemical sectors of Trinidad and Tobago," Policy Sciences, Springer;Society of Policy Sciences, vol. 41(2), pages 181-182, June.
    15. repec:dau:papers:123456789/4336 is not listed on IDEAS
    16. World Bank, 2012. "World Development Report 2013
      [Informe anual del Banco Mundial de 2013 : poner fin a la pobreza extrema, promover la prosperidad compartida - informe principal]
      ," World Bank Publications, The World Bank, number 11843, June.
    17. World Bank, 2006. "Fostering Higher Growth and Employment in the Kingdom of Morocco," World Bank Publications, The World Bank, number 7114, June.
    18. World Bank, 2007. "Nigeria - Competitiveness and Growth : Country Economic Memorandum, Volume 2. Main Report," World Bank Other Operational Studies 7824, The World Bank.

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