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Does development zone have spillover effect in China?

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  • Deming Luo
  • Yanjun Liu
  • Yiyun Wu
  • Xiwei Zhu
  • Xiangrong Jin

Abstract

We construct a new database of spatial relations between industrial firms and development zones using the Application Programming Interface addressing and document the development zones' spillover effect on firms' total factor productivity (TFP). Development zones significantly improve the TFP of surrounding firms, which attenuates with the distance from a development zone, and increases with the density of development zones in a given area. The spillover effect of national development zones decays more sharply than that of provincial ones. The rectification project improves firms' TFP and the spillover effect of development zones. The establishment of development zones affects surrounding firms' TFP, where TFP of newly entered firms decreases in the short term but soon rises rapidly.

Suggested Citation

  • Deming Luo & Yanjun Liu & Yiyun Wu & Xiwei Zhu & Xiangrong Jin, 2015. "Does development zone have spillover effect in China?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 20(3), pages 489-516, July.
    • Handle: RePEc:taf:rjapxx:v:20:y:2015:i:3:p:489-516
    DOI: 10.1080/13547860.2015.1054171
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    12. Jingjing Chen & Han Feng & Hong Zhou, 2022. "Local industrial policy and productivity: Evidence from China," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 138-161, January.
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