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Platform advantages or "policy trap" for neighbors? Export effects of establishing free trade zone in China: A quasi-natural experiment

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  • Cen, Cong
  • Wang, Peng

Abstract

As the important regional policy arrangements for China to implement a new round of opening-up strategy, the free trade zone (FTZ) policy have significant impacts on export trade. Based on the quasi-natural experiment of China's establishment of FTZs, the article evaluates the impact of the FTZs on enterprises' exports by using export data from Chinese Customs database and statistics of prefecture-level cities in China from 2007 to 2018. The analyses found that the FTZs has significantly promoted local exports. The FTZs has negative spatial externalities on export activities, which reduces the export performance of neighboring cities. The export effects of FTZs present continuous and dynamic characteristics. There is heterogeneity in the marginal impact of FTZs in different locations on the exports of enterprise. These findings provide empirical evidence for a more comprehensive understanding of the impact of the establishment of FTZs on enterprises' exports in the spatial dimension.

Suggested Citation

  • Cen, Cong & Wang, Peng, 2024. "Platform advantages or "policy trap" for neighbors? Export effects of establishing free trade zone in China: A quasi-natural experiment," International Review of Economics & Finance, Elsevier, vol. 96(PB).
    • Handle: RePEc:eee:reveco:v:96:y:2024:i:pb:s1059056024006269
    DOI: 10.1016/j.iref.2024.103634
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    More about this item

    Keywords

    Free trade zone; Export performance; Spatial externalities; China;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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