IDEAS home Printed from https://ideas.repec.org/a/wsi/jicepx/v13y2022i02ns1793993322500065.html
   My bibliography  Save this article

Can China’s Pilot Free Trade Zone Improve Trade Efficiency?

Author

Listed:
  • Lianghu Wang

    (School of Economics and Management, Southeast University, Nanjing 211189, China)

  • Jun Shao

    (School of Economics and Management, Southeast University, Nanjing 211189, China)

Abstract

In recent years, there were many researches on China Free Trade Pilot Zone (FTZ), however, there was still a lack of research on the effect of the FTZ on trade efficiency. To make up for gaps in research, this paper calculated the trade efficiency of 30 provinces in China with stochastic frontier gravity model, and then empirically tested the policy effect of the FTZ by using the propensity score matching and difference in difference (PSM-DID) method, and further analyzed the inherent mechanism. The results showed that China’s general level of trade efficiency was relatively low, while the average trade efficiency in FTZs was significantly higher. The establishment of the FTZ had a significant positive impact on trade efficiency advances. Before and after the establishment of the pilot free trade zone, the difference between the changes in the trade efficiency measurement results of the treated group provinces and the trade efficiency measurement results of the control group provinces showed the characteristics of first increasing and then decreasing, and the policy effect has a certain lag. The establishment of the FTZ significantly reduced the trade cost. The model estimated that the trade efficiency increased by 3.576% for every 1% growth of trade cost, and the policy effect of the FTZ was significantly positive, which verified the existence of the intermediary effect of trade cost.

Suggested Citation

  • Lianghu Wang & Jun Shao, 2022. "Can China’s Pilot Free Trade Zone Improve Trade Efficiency?," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 1-20, June.
    • Handle: RePEc:wsi:jicepx:v:13:y:2022:i:02:n:s1793993322500065
    DOI: 10.1142/S1793993322500065
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S1793993322500065
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S1793993322500065?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.

    Citations

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


    Cited by:

    1. Guan, Chenghua & Huang, Jinyuan & Jiang, Ruyue & Xu, Wanting, 2023. "The impact of pilot free trade zone on service industry structure upgrading," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 472-491.
    2. Xu, Shiteng & Shen, Ronghua & Zhang, Yahua & Cai, Yifei, 2024. "Fostering regional innovation efficiency through pilot free trade zones: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 356-367.
    3. Siwen Xia & Jiaying Han & Anglu Li & Penghao Ye & Huarong Zhang, 2024. "Impact of Free Trade (Pilot) Zone Establishment on Urban Land Use Efficiency—Empirical Evidence from Cities in China," Land, MDPI, vol. 13(7), pages 1-25, July.
    4. Li, Zhaohua & Pang, Suqin & Zhu, Zhiyun, 2024. "The impact of pilot free trade zones on entrepreneurship: Evidence from a quasi-natural experiment in China," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    5. Weibing Chen & Bian Wu & Qing Guo, 2024. "The efficiency of China's export trade with Africa and its influence mechanism," African Development Review, African Development Bank, vol. 36(2), pages 187-200, June.

    More about this item

    Keywords

    Pilot free trade zone; trade efficiency; stochastic frontier gravity model; PSM-DID; trade cost;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

    Statistics

    Access and download statistics

    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:wsi:jicepx:v:13:y:2022:i:02:n:s1793993322500065. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/jicep/jicep.shtml .

    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.