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Do China’s pilot free trade zones promote green dual-circulation development? Based on the DID model

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  • Liuliu Lai
  • Yanjun Chang

Abstract

Accelerating the formation of a green dual-circulation pattern is an essential strategic choice for China to achieve high-quality development. As a vital link for two-way economic and trade cooperation, the pilot free trade zone (PFTZ) is an important window for promoting green dual-circulation development. From the perspective of green dual-circulation, this paper attempts to construct a comprehensive index system of green dual-circulation by entropy weight method based on Chinese provincial panel data from 2007 to 2020 and uses the Propensity Score Matching–Difference in Differences method to test the policy impact of PFTZ building on regional green dual-circulation. The empirical results show that: (1) the establishment of PFTZs significantly promotes regional green dual-circulation development by 3%-4%. This policy effect has a strong positive impact on the eastern regions; (2) PFTZs can improve regional green dual circulation through the effect of green finance, technological progress, and the agglomeration of innovative talents. The mediating effect of green finance and technological progress is more pronounced; (3) The promotion effect of PFTZs is primarily due to the local green circulation effect, with no significant effects on the surrounding areas; and (4) There is a positive policy linkage effect between PFTZs and the Belt and Road Initiative. This study creates the analytical perspective and empirical support for assessing the policy impact of PFTZs and provides management insights for PFTZ policymakers in promoting green dual-circulation development.

Suggested Citation

  • Liuliu Lai & Yanjun Chang, 2023. "Do China’s pilot free trade zones promote green dual-circulation development? Based on the DID model," PLOS ONE, Public Library of Science, vol. 18(3), pages 1-22, March.
    • Handle: RePEc:plo:pone00:0281054
    DOI: 10.1371/journal.pone.0281054
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