Educational spillovers from overseas economic parks: Financial and trade mediation effects

This paper investigates how China's overseas economic parks foster inbound degree-seeking student enrollment through trade and financial channels. Exploiting the staggered rollout of three park definitions, key parks DID30, Ministry-recorded parks DID103 and all under-construction parks DID182, we apply two-way fixed-effects difference-in-differences and propensity-score–matched DID methods to annual data on 196 countries from 2003 to 2018. Baseline estimates show that flagship park openings raise degree-seeking enrollment by approximately 26 percent, with similar magnitudes across alternate treatment measures. Heterogeneity tests reveal stronger effects in lower-income and culturally proximate markets, and weaker gains in countries with higher trade integration or currency depreciation. A three-equation mediation framework demonstrates that parks increase bilateral exports to China by 17 percent and concessional policy-bank lending by 21 percent; each 1 percent rise in trade and finance inflows is associated with 0.15 percent and 0.12 percent increases in enrollment, respectively. Joint mediation estimates indicate that these channels account for nearly 60 percent of the total spillover effect. Our findings highlight infrastructure diplomacy as a potent mechanism for educational exchange and suggest that integrating scholarship programs and local-currency financing into park master plans can amplify human-capital returns.