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Formation of special economic zone, liberalized FDI policy and agricultural productivity

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  • Chaudhuri, Sarbajit
  • Yabuuchi, Shigemi

Abstract

Formation of Special Economic Zone (SEZ) using agricultural land to promote industrialization has recently been one of the most controversial policy issues in many developing economies including India. This paper critically evaluates the consequences of this policy in terms of a three-sector Harris-Todaro type general equilibrium model characterizing a typical developing economy. It finds that agriculture and SEZ can grow simultaneously provided the government spends a substantial amount of its resources on irrigation projects and other infrastructural development designed at improving the efficiency of land. Agricultural wage and aggregate employment in the economy may also improve owing to this policy.

Suggested Citation

  • Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2010. "Formation of special economic zone, liberalized FDI policy and agricultural productivity," International Review of Economics & Finance, Elsevier, vol. 19(4), pages 779-788, October.
    • Handle: RePEc:eee:reveco:v:19:y:2010:i:4:p:779-788
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    Cited by:

    1. Sina Hardaker, 2020. "Embedded Enclaves? Initial Implications of Development of Special Economic Zones in Myanmar," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(2), pages 404-430, April.
    2. John Gilbert & Hamid Beladi & Reza Oladi, 2015. "North–South Trade Liberalization and Economic Welfare," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 1006-1017, November.
    3. Pi Jiancai & Zhou Yu, 2015. "Rural Property Rights, Migration, and Welfare in Developing Countries," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 997-1029, July.
    4. Dhahri, Sabrine & Omri, Anis, 2020. "Foreign capital towards SDGs 1 & 2—Ending Poverty and hunger: The role of agricultural production," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 208-221.
    5. Chaudhuri, Sarbajit & Biswas, Anindya, 2016. "Endogenous labour market imperfection, foreign direct investment and external terms-of-trade shocks in a developing economy," Economic Modelling, Elsevier, vol. 59(C), pages 416-424.
    6. Soumyatanu Mukherjee, 2013. "Labour Market Entry and Earnings: Evidence from Tanzanian Retrospective Data," Discussion Papers 13/07, University of Nottingham, CREDIT.
    7. Ronald B. Davies & Arman Mazhikeyev, 2019. "The Impact of Special Economic Zones on Exporting Behavior," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 11(1), pages 145-174, July.
    8. Chaudhuri, Sarbajit, 2015. "Endogenous Labour Market Imperfections, FDI and External Terms-of-Trade Shocks in a Developing Economy," MPRA Paper 61594, University Library of Munich, Germany.
    9. Dwibedi, Jayanta & Chaudhuri, Sarbajit, 2011. "Poverty alleviation programs, FDI-led growth and child labour under agricultural dualism," MPRA Paper 29997, University Library of Munich, Germany.
    10. Nazarczuk, Jarosław M. & Umiński, Stanisław, 2019. "Foreign Trade in Special Economic Zones in Poland," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 204302, July.
    11. Chaudhuri, Sarbajit, 2010. "Economic recession, demand constraint and labour markets in a developing economy," MPRA Paper 27433, University Library of Munich, Germany.
    12. Yang Liu & Yidan Jin, 2022. "Special economic zones, export status, and firms’ productivity: Theory and evidence from China," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1338-1360, August.

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