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Comparative analysis of the economic effects of special economic zones in China and Korea: evidence from a PSM difference-in-difference method

Author

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  • Min Jiang
  • Hongbo Liu
  • Euijune Kim

Abstract

This paper examines the economic effects of the establishment of Special Economic Zones (SEZs) on the export of industrial complexes in China and Korea, focusing on the synergistic economic effects between different types of SEZs, using the Propensity Score Matching difference-in-difference method. We use panel data of 284 Chinese cities and 162 Korean cities between 2000 and 2019, focusing on 93 industrial complexes in China, and 569 industrial complexes in Korea. We compare the effects of Free Trade Zones (FTZs) with other special economic zones, including Bonded Areas (BA) in China and Free Economic Zones (FEZ) and Foreign Investment Regions (FIZ) in Korea. The establishment of SEZs has a significant positive impact on the export growth of industrial complexes in both China and Korea. In Korea, a significant synergy effect on export is found between the FTZ and the FIZs. There is no synergy effect found between FEZs and other economic zones. After the implementation of the FTZ policy in China, the export of BA’s industrial complexes with ports and airports significantly increased, indicating that the FTZs have a positive synergy effect on the BAs with convenient transportation.

Suggested Citation

  • Min Jiang & Hongbo Liu & Euijune Kim, 2026. "Comparative analysis of the economic effects of special economic zones in China and Korea: evidence from a PSM difference-in-difference method," Applied Economics Letters, Taylor & Francis Journals, vol. 33(1), pages 24-29, January.
    • Handle: RePEc:taf:apeclt:v:33:y:2026:i:1:p:24-29
    DOI: 10.1080/13504851.2024.2363977
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