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Special economic zones and innovation in developing and emerging economies: A cross-country analysis

Author

Listed:
  • Abdulhak Anwer Alsharif

    (Philipps-Universität Marburg, Department of Economic Geography and Location Research)

  • Thomas Brenner

    (Philipps-Universität Marburg, Department of Economic Geography and Location Research)

Abstract

Special economic zones (SEZs) have become a widely adopted economic policy tool in developing and emerging economies, particularly over the last two decades. Despite the increasing importance of SEZs, the literature on their impact on innovation remains scarce and non-conclusive, with most existing literature focused on single-country case studies. Our research addresses this gap by offering an analysis across multiple countries. We employ a difference-in-differences (DiD) approach to find out whether SEZ establishment has an impact on innovation activity within these zones. Our results demonstrate a positive effect of SEZs on patent numbers, indicating that SEZs can indeed stimulate innovation. Additionally, we uncover heterogeneous effects on different innovation activities, with SEZs having a stronger influence on high-tech compared to low-tech industries. Moreover, the impact of SEZs varies across different technological fields, highlighting the sector-specific nature of innovation dynamics within SEZs.

Suggested Citation

  • Abdulhak Anwer Alsharif & Thomas Brenner, 2026. "Special economic zones and innovation in developing and emerging economies: A cross-country analysis," Journal of Evolutionary Economics, Springer, vol. 36(1), pages 1-21, April.
    • Handle: RePEc:spr:joevec:v:36:y:2026:i:1:d:10.1007_s00191-026-00949-6
    DOI: 10.1007/s00191-026-00949-6
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    Keywords

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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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