What draws investment to special economic zones? Lessons from developing countries

Susanne A. Frick · Andrés Rodríguez‐Pose

59 citations0/0 files storedRegional Studies

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Economic Zones and Regional Development International Business and FDI Regional Economics and Spatial Analysis

Abstract

Special economic zones (SEZs) are a popular policy tool for the promotion of economic development. However, questions remain about their economic contribution and about what aspects of SEZ policies are most relevant to investors. This article sheds light on these issues by comparing SEZs across Africa, Asia and Latin America. We find that while investment decisions by foreign companies are driven by market access, political stability and low labour costs, adequate SEZ policies facilitate the attraction of investment. A good industrial infrastructure together with a strategic location and service provision within the zones draw investment. Fiscal incentives, by contrast, have a limited influence on investment decisions.

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References

1990Qualitative evaluation and research methods 2005A Review of the Empirical Literature on FDI Determinants 2012The economic impact of Special Economic Zones: Evidence from Chinese municipalities 2010FDI location choice of Chinese multinationals in East and Southeast Asia: Traditional economic factors and institutional perspective 2016The location choice of foreign direct investments: Empirical evidence and methodological challenges 1999A Review of the Role and Impact of Export Processing Zones 2011Special Economic Zones in Africa 2019World Investment Report 2019

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