IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v81y2024icp208-224.html
   My bibliography  Save this article

Does the construction of Pilot Free Trade Zones promote the development of green economy? - A quasi-natural experiment evidence from China

Author

Listed:
  • Yan, Xiaolei
  • He, Taiyi
  • Qian, Pengcheng
  • Liu, Zhongwen

Abstract

China has established Pilot Free Trade Zones (PFTZs) since 2013. However, there have been limited studies concerning the green economic effects of this policy. Given the uncertainties surrounding the relationship between this policy and regional green economic development, this paper employs a multi-period difference-in-differences (DID) method to evaluate the impact of the PFTZ policy on local green economy efficiency (GEE) by using provincial-level data in China from 2009 to 2019. We yield that the construction of PFTZs significantly contributes to the positive growth of regional GEE. Subsequently, we conduct a series of robustness tests to ensure the credibility of this finding. In addition, Further findings demonstrate that technological progress and industrial structure upgrading are two critical channels in achieving this positive effect. Notably, we also find that the construction of PFTZs stimulate the dynamics of market mechanisms to promote green economic development. Interestingly, heterogeneity analysis results suggest that the PFTZ policy seems to be more positively embedded in southern China and regions with higher degrees of openness. Conclusively, our findings demonstrate the establishment of PFTZs effectively promotes local green economic development and provide empirical evidence that a profound opening-up pilot policy is less likely to transform China into a Pollution Haven.

Suggested Citation

  • Yan, Xiaolei & He, Taiyi & Qian, Pengcheng & Liu, Zhongwen, 2024. "Does the construction of Pilot Free Trade Zones promote the development of green economy? - A quasi-natural experiment evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 208-224.
    • Handle: RePEc:eee:ecanpo:v:81:y:2024:i:c:p:208-224
    DOI: 10.1016/j.eap.2023.11.032
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592623003132
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2023.11.032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Justin Yifu Lin, 2011. "New Structural Economics: A Framework for Rethinking Development," The World Bank Research Observer, World Bank, vol. 26(2), pages 193-221, August.
    2. Tone, Kaoru & Sahoo, Biresh K., 2003. "Scale, indivisibilities and production function in data envelopment analysis," International Journal of Production Economics, Elsevier, vol. 84(2), pages 165-192, May.
    3. Dongshui Xie & Caiquan Bai & Weiwei Xiao, 2022. "Institutional environment, development model transformation and North–South economic disparity in China," Growth and Change, Wiley Blackwell, vol. 53(4), pages 1877-1906, December.
    4. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    5. Jiaxiang Hu, 2017. "A Retrospective View on the First Three Years of China (Shanghai) Pilot Free Trade Zone," Chinese Economy, Taylor & Francis Journals, vol. 50(4), pages 225-237, July.
    6. Tang, Maogang & Li, Xiuzhen & Zhang, Yun & Wu, Yingtao & Wu, Baijun, 2020. "From command-and-control to market-based environmental policies: Optimal transition timing and China’s heterogeneous environmental effectiveness," Economic Modelling, Elsevier, vol. 90(C), pages 1-10.
    7. Zhu, Bangzhu & Zhang, Mengfan & Zhou, Yanhua & Wang, Ping & Sheng, Jichuan & He, Kaijian & Wei, Yi-Ming & Xie, Rui, 2019. "Exploring the effect of industrial structure adjustment on interprovincial green development efficiency in China: A novel integrated approach," Energy Policy, Elsevier, vol. 134(C).
    8. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    9. M.A. Cole & A.J. Rayner & J.M. Bates, 1998. "Trade Liberalisation and the Environment: The Case of the Uruguay Round," The World Economy, Wiley Blackwell, vol. 21(3), pages 337-347, May.
    10. Raphael Calel & Antoine Dechezleprêtre, 2016. "Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 173-191, March.
    11. Zhou, Fengxiu & Wang, Xiaoyu, 2022. "The carbon emissions trading scheme and green technology innovation in China: A new structural economics perspective," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 365-381.
    12. Sha, Ru & Li, Jinye & Ge, Tao, 2021. "How do price distortions of fossil energy sources affect China's green economic efficiency?," Energy, Elsevier, vol. 232(C).
    13. Tingru Zhao & Feng He, 2022. "Does the Pilot Free Trade Zone Promote the Quality of Urban Economic Growth: An Empirical Research Based on Quasi-Natural Experiment," Sustainability, MDPI, vol. 14(12), pages 1-14, June.
    14. Thorsten Beck & Ross Levine & Alexey Levkov, 2010. "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States," Journal of Finance, American Finance Association, vol. 65(5), pages 1637-1667, October.
    15. Su, Yi & Fan, Qi-ming, 2022. "Renewable energy technology innovation, industrial structure upgrading and green development from the perspective of China's provinces," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    16. Peng, Jiaying & Xie, Rui & Ma, Chunbo & Fu, Yang, 2021. "Market-based environmental regulation and total factor productivity: Evidence from Chinese enterprises," Economic Modelling, Elsevier, vol. 95(C), pages 394-407.
    17. Chen, Lifeng & Wang, Kaifeng, 2022. "The spatial spillover effect of low-carbon city pilot scheme on green efficiency in China's cities: Evidence from a quasi-natural experiment," Energy Economics, Elsevier, vol. 110(C).
    18. Jiang, Yufan & Wang, Hongyan & Liu, Zuankuo, 2021. "The impact of the free trade zone on green total factor productivity ——evidence from the shanghai pilot free trade zone," Energy Policy, Elsevier, vol. 148(PB).
    19. Yuan, Huaxi & Feng, Yidai & Lee, Chien-Chiang & Cen, Yan, 2020. "How does manufacturing agglomeration affect green economic efficiency?," Energy Economics, Elsevier, vol. 92(C).
    20. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    21. Joshua D. Angrist & Jörn-Steffen Pischke, 2014. "Mastering ’Metrics: The Path from Cause to Effect," Economics Books, Princeton University Press, edition 1, number 10363.
    22. Wang, Xinyue & Wang, Qing, 2021. "Research on the impact of green finance on the upgrading of China's regional industrial structure from the perspective of sustainable development," Resources Policy, Elsevier, vol. 74(C).
    23. Zhao, Xin & Mahendru, Mandeep & Ma, Xiaowei & Rao, Amar & Shang, Yuping, 2022. "Impacts of environmental regulations on green economic growth in China: New guidelines regarding renewable energy and energy efficiency," Renewable Energy, Elsevier, vol. 187(C), pages 728-742.
    24. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    25. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 755-787.
    26. Tone, Kaoru, 2002. "A slacks-based measure of super-efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 143(1), pages 32-41, November.
    27. Mehdi Nemati & Wuyang Hu & Michael Reed, 2019. "Are free trade agreements good for the environment? A panel data analysis," Review of Development Economics, Wiley Blackwell, vol. 23(1), pages 435-453, February.
    28. Lutao Ning & Fan Wang, 2018. "Does FDI Bring Environmental Knowledge Spillovers to Developing Countries? The Role of the Local Industrial Structure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 381-405, October.
    29. Dong, Baomin & Guo, Yibei & Hu, Xiaotian, 2022. "Intellectual property rights protection and export product quality: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 143-158.
    30. Chang Huang & Xiao Chang & Yang Wang & Nicolas Li, 2023. "Do major customers encourage innovative sustainable development? Empirical evidence from corporate green innovation in China," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 163-184, January.
    31. Hao Chen & Bo Yuan & Qi Cui, 2021. "Does the pilot free trade zone policy attract the entering of foreign-invested enterprises? The evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 28(14), pages 1162-1168, August.
    32. Meng, Meixia & Shang, Yuping & Yang, Yang, 2021. "Did highways cause the urban polycentric spatial structure in the Shanghai metropolitan area?," Journal of Transport Geography, Elsevier, vol. 92(C).
    33. Zhihua Tian & Yanfang Tian & Yang Chen & Shuai Shao, 2020. "The economic consequences of environmental regulation in China: From a perspective of the environmental protection admonishing talk policy," Business Strategy and the Environment, Wiley Blackwell, vol. 29(4), pages 1723-1733, May.
    34. Chung, Sunghoon, 2014. "Environmental regulation and foreign direct investment: Evidence from South Korea," Journal of Development Economics, Elsevier, vol. 108(C), pages 222-236.
    35. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    36. Keller, Wolfgang & Andres Santiago, Javier & Shiue, Carol H., 2017. "China's domestic trade during the Treaty-Port Era," Explorations in Economic History, Elsevier, vol. 63(C), pages 26-43.
    37. Cao, June & Li, Wenwen & Bilokha, Alona, 2022. "Low-carbon city initiatives and analyst behaviour: A quasi-natural experiment," Journal of Financial Stability, Elsevier, vol. 62(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chunxue Liu & Gaizhen Feng, 2024. "Can Pilot Free Trade Zones Promote Sustainable Growth in Urban Innovation?," Sustainability, MDPI, vol. 16(13), pages 1-17, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yuan Feng & Ying Li & Changfei Nie, 2023. "The Effect of Place-Based Policy on Urban Land Green Use Efficiency: Evidence from the Pilot Free-Trade Zone Establishment in China," Land, MDPI, vol. 12(3), pages 1-19, March.
    2. Cenjie Liu & Chunbo Ma & Rui Xie, 2020. "Structural, Innovation and Efficiency Effects of Environmental Regulation: Evidence from China’s Carbon Emissions Trading Pilot," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 741-768, April.
    3. Qingshan Ma & Yuanmeng Zhang & Kexin Yang & Lingyun He, 2021. "Have China’s Pilot Free Trade Zones Improved Green Total Factor Productivity?," IJERPH, MDPI, vol. 18(21), pages 1-20, November.
    4. Yuanyuan Wu & Zhanhua Jia & Tingting Yu, 2022. "Tourism and Green Development: Analysis of Linear and Non-Linear Effects," IJERPH, MDPI, vol. 19(23), pages 1-22, November.
    5. Koch, Nicolas & Basse Mama, Houdou, 2019. "Does the EU Emissions Trading System induce investment leakage? Evidence from German multinational firms," Energy Economics, Elsevier, vol. 81(C), pages 479-492.
    6. Li, Bo & Han, Yukai & Wang, Chensheng & Sun, Wei, 2022. "Did civilized city policy improve energy efficiency of resource-based cities? Prefecture-level evidence from China," Energy Policy, Elsevier, vol. 167(C).
    7. Yongyi Cheng & Liheng Lu & Tianyuan Shao & Manhong Shen & Laiqun Jin, 2018. "Decomposition Analysis of Factors Affecting Changes in Industrial Wastewater Emission Intensity in China: Based on a SSBM-GMI Approach," IJERPH, MDPI, vol. 15(12), pages 1-23, December.
    8. Yongyi Cheng & Tianyuan Shao & Huilin Lai & Manhong Shen & Yi Li, 2019. "Total-Factor Eco-Efficiency and Its Influencing Factors in the Yangtze River Delta Urban Agglomeration, China," IJERPH, MDPI, vol. 16(20), pages 1-14, October.
    9. Zhou, Mengling & Wang, Bing & Chen, Zhongfei, 2020. "Has the anti-corruption campaign decreased air pollution in China?," Energy Economics, Elsevier, vol. 91(C).
    10. Yanhong Feng & Shuanglian Chen & Pierre Failler, 2020. "Productivity Effect Evaluation on Market-Type Environmental Regulation: A Case Study of SO 2 Emission Trading Pilot in China," IJERPH, MDPI, vol. 17(21), pages 1-27, October.
    11. Qiao-xin Xie & Yu Zhang & Jing-er Ge, 2023. "Enterprise economic influence and implementation deviation of green credit policy: evidence from China," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 81-111, April.
    12. Bei Wang & Hong Chen & Ruiqi Chen & Weiting Zeng & Lechuan Ye, 2023. "Does the Green Development of Cities Need High-Level Opening Up? A Quasi-Natural Experiment Based on China’s Pilot Free Trade Zone," Sustainability, MDPI, vol. 15(7), pages 1-20, March.
    13. Feng, Yuan & Chen, Zhi & Nie, Changfei, 2023. "The effect of broadband infrastructure construction on urban green innovation: Evidence from a quasi-natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 581-598.
    14. Zhang, Fuyu & Wang, Qiang & Li, Rongrong, 2024. "Linking natural resource abundance and green growth: The role of energy transition," Resources Policy, Elsevier, vol. 91(C).
    15. Lingzhang Kong & Jinye Li, 2022. "Digital Economy Development and Green Economic Efficiency: Evidence from Province-Level Empirical Data in China," Sustainability, MDPI, vol. 15(1), pages 1-26, December.
    16. Senhua Huang & Lingming Chen, 2023. "The Impact of the Digital Economy on the Urban Total-Factor Energy Efficiency: Evidence from 275 Cities in China," Sustainability, MDPI, vol. 15(4), pages 1-20, February.
    17. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    18. Chunhua Xin & Xiufeng Lai, 2022. "Does the Environmental Information Disclosure Promote the High-Quality Development of China’s Resource-Based Cities?," Sustainability, MDPI, vol. 14(11), pages 1-26, May.
    19. Qi, Xiulin & Wu, Zhifang & Xu, Jinqing & Shan, Biaoan, 2023. "Environmental justice and green innovation: A quasi-natural experiment based on the establishment of environmental courts in China," Ecological Economics, Elsevier, vol. 205(C).
    20. Bo Li & Jing Liu & Qian Liu & Muhammad Mohiuddin, 2022. "The Effects of Broadband Infrastructure on Carbon Emission Efficiency of Resource-Based Cities in China: A Quasi-Natural Experiment from the “Broadband China” Pilot Policy," IJERPH, MDPI, vol. 19(11), pages 1-27, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:81:y:2024:i:c:p:208-224. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.