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The Impact of China’s Pilot Free Trade Zones on the Development of Urban New Quality Productive Forces

Author

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  • Renyu Li

    (School of Business, Hunan University of Science and Technology, Xiangtan 411100, China)

  • Jing Luo

    (School of Business, Hunan University of Science and Technology, Xiangtan 411100, China)

  • Xuan Zhan

    (School of Business, Hunan University of Science and Technology, Xiangtan 411100, China)

Abstract

The establishment of Pilot Free Trade Zones (PFTZs) is a key strategic measure in China’s new-era reform agenda, aimed at comprehensively advancing opening-up and fostering high-quality economic development. This paper aims to investigate whether and how the establishment of PFTZs promotes the development of new quality productive forces (NQPFs) in China. Taking the PFTZs policy as a quasi-natural experiment, this paper employs panel data from 270 prefecture-level cities spanning 2010 to 2022 and adopts a multi-period difference-in-differences (DID) model to identify the causal effects of PFTZs. The results show that establishing PFTZs significantly enhances the development of NQPFs. Heterogeneity analysis revealed that this promoting effect is more significant in cities with higher administrative status and in inland regions. Mechanism analyses reveal that PFTZs facilitate the development of NQPFs primarily by raising external economic openness and fostering industrial agglomeration. Furthermore, the positive impact of PFTZs is strengthened by higher levels of urban logistics development. This study offers theoretical and empirical evidence on how strengthening institutional development can facilitate high-quality and sustainable economic development.

Suggested Citation

  • Renyu Li & Jing Luo & Xuan Zhan, 2026. "The Impact of China’s Pilot Free Trade Zones on the Development of Urban New Quality Productive Forces," Sustainability, MDPI, vol. 18(8), pages 1-22, April.
    • Handle: RePEc:gam:jsusta:v:18:y:2026:i:8:p:4001-:d:1922362
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