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Industrial zones – an effective tool of regional development support in transitive economy? Case study: The Czech Republic

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  • Milan Damborsky
  • Rene Wokoun
  • Nikola Krejcova
  • Bozena Kaderabkova

Abstract

Investment incentives as well as promotion of industrial zones become one of the most debated issue for experts, especially in connection with the effect of foreign direct investments on economies at both national and regional levels. The aim of this paper is to assess the effectiveness of promotion of industrial zones as the key tool of regional development support in the framework of economic conditions in the Czech Republic. The assessment is focused on industrial zones support which was provided by the Ministry of Industry and Trade in the Czech Republic or, more precisely, the CzechInvest agency in the framework of the Programme on Industrial Zones Development Support, Programme on Business Zones and Infrastructure Support and the Investment Incentives System. This paper´s main source is the data set obtained in empirical research carried out by authors throughout industrial zones across the Czech Republic. Another important source was the accomplished analysis of economic management of all economic subjects observed in the supported industrial zones mentioned above. The research shows that firms in industrial zones have positive effects on the regional labor market, that companies in industrial zones contribute to technological development through restructuring of industry and affect SMEs positively, that industrial zones improve the business image of the region. The negative effect on the environment is low and the impact of industrial zones on social cohesion may be considered as neutral. Firms contribute to efficient use of available resources, creating greater added value. In the context of economic development, it is also possible to evaluate positively stable export growth in its absolute value; wages of workers in industrial zones may be assessed as above average as firms try to get quality workforce. The contribution of observed companies (or industrial zones) to the total number of jobs created in R&D is very limited. Industrial zones may be considered as significant accelerators of secondary sector development and, to a relatively lesser extent, also on the Quaternary and Quinternary. To assess the impact of the state support in industrial zones on the state budget, a complex function has been compiled to map specific indicators. The model has been applied in three variants: 'pessimistic', 'medium' and 'optimistic' and has implemented data from the period of 2006 to 2009.

Suggested Citation

  • Milan Damborsky & Rene Wokoun & Nikola Krejcova & Bozena Kaderabkova, 2012. "Industrial zones – an effective tool of regional development support in transitive economy? Case study: The Czech Republic," ERSA conference papers ersa12p1017, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa12p1017
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    3. Grahame Fallon & Mark Cook, 2010. "Exploring the Regional Distribution of Inbound Foreign Direct Investment in the UK in Theory and Practice: Evidence from a Five-Region Study," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 337-353.
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