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Impact of national industrial transfer demonstration zones policy on high-quality economic development in China

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  • Zhang, Xiaoqi
  • He, Yu

Abstract

To undertake advanced industries and promote sustainable economic development, Chinese authorities announced the National Industrial Transfer Demonstration Zones (Indzone) policy in January 2010. Thus, this study utilizes a multiperiod spatial difference-in-differences methodology and a city-level panel data during 2006–2019 to explore the spatial spillover effect of Indzone on high-quality economic development (Ecoscore). The Dagum Gini coefficient highlights striking regional differences in Ecoscore, primarily driven by interregional differences (rather than intraregional) among the eastern, middle, and western regions. Moran’s indexes for Ecoscore were significantly positive during the sample period. Benchmark analysis and robustness tests demonstrate that Indzone has positive direct and negative indirect impacts on Ecoscore, suggesting that the policy benefits pilot cities but hurts non-pilot ones. Several additional tests are further applied for deeper exploration. First, subsample tests show significant heterogeneous effects of Indzone on Ecoscore under different circumstances. Second, mechanism analyses reveal that the effect of Indzone on Ecoscore increase when technological innovation, industrial structure advancement and human capital level exceed certain values. Third, the dynamic effect analysis shows a rising trend in the effect of the Indzone on Ecoscore. Our study provides suggestions for Chinese authorities and policymakers in other emerging markets, as these countries may apply similar policies to upgrade their industrial structure and further foster economic sustainability.11Abbreviations: Indzone: National Industrial Transfer Demonstration Zone; Ecoscore: high-quality economic development; GDP: gross domestic product; MSDID: multiperiod spatial difference-in-differences; DGC: Dagum Gini coefficient; Moran’s I: Moran’s index; DID: difference-in-differences; PSM: propensity score matching; Techn: technological innovation; Instra: industrial structure advancement; IFDI: inward foreign direct investment; OFDI: outward foreign direct investment. SDM: spatial Durbin model; Popden: population density; Finan: financial development; Fortra: foreign trade dependence; Infras: infrastructure construction.

Suggested Citation

  • Zhang, Xiaoqi & He, Yu, 2025. "Impact of national industrial transfer demonstration zones policy on high-quality economic development in China," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 1179-1197.
    • Handle: RePEc:eee:ecanpo:v:87:y:2025:i:c:p:1179-1197
    DOI: 10.1016/j.eap.2025.07.015
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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