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Trade Effect of the Free Trade Zone

Author

Listed:
  • Chao Zhou
  • Ying Su

Abstract

Facing to the increasingly complex international environment and the new normal of China's economic growth, the pilot of free trade zone is an important measure for China to further deepen reform and opening up. Promoting trade liberalization is an important part of the construction of the free trade zone. Based on the city panel data from 2004 to 2018, this paper analyzes the trade effects of 11 free trade zones established in 2017 and before by using the method of period by period did. Also the trade effect of each free trade zone is analyzed separately by the method of synthetic control.The results show that, firstly, the free trade zone has obvious trade promotion effect on total trade and export trade, but not on import trade. Second, the trade promotion effect of the pilot free trade zone is not significant in the eastern region, but there is an obvious trade promotion effect in the central and western regions. Thirdly, the analysis of each pilot free trade zone also shows some heterogeneity. Generally speaking, the trade effect of export is greater than that of import.Specifically speaking, the pilot free trade zone shows certain heterogeneity, which may be related to the local economic development level and econnmic scale.

Suggested Citation

  • Chao Zhou & Ying Su, 2021. "Trade Effect of the Free Trade Zone," International Business Research, Canadian Center of Science and Education, vol. 14(1), pages 1-34, January.
    • Handle: RePEc:ibn:ibrjnl:v:14:y:2021:i:1:p:34
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    References listed on IDEAS

    as
    1. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
    2. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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