Using special economic zones to facilitate development: Policy implications

Abstract

This issue of the Transnational Corporations journal is dedicated to special economic zones (SEZs) and their potential as vehicles for development. In compiling this issue, we sought to contextualise the emergence of SEZs, their evolution, and the associated policy trajectories that underpin them. This introductory paper| amalgamates observations from the broader academic literature, the findings of the World Investment Report 2019, and its associated background papers. A common theme is that a welldesigned zone will evolve with the changing comparative advantages and development level of the underlying economy, in what is described as the "SEZ development ladder". As the location advantages change, the emphasis and the objectives of the SEZ must also change. Reliance on "generic" location advantages must necessarily diminish, and greater emphasis needs to be placed on developing "specialized" location advantages. Another key finding is that the benefits of an SEZ must intentionally "leak" beyond the perimeter of the zone. The pervasiveness of the direct, indirect, and induced extra-SEZ effects beyond the geographically bounded space of the SEZ determines its success or failure. Scope remains for future research on SEZs focusing on their sustainability, the impact of the digital economy and industry 4.0, and the involvement of new financing partners for SEZ development.

Leveraging low state capacity for economic development: a case study of Tajik–Afghan cross-border markets

“…An alternative approach to the study of the state and economic growth is the relatively nascent literature on SEZs. In its most basic form, an SEZ is a geographically defined area that enjoys some form of legal benefit to spur economic activity (Narula and Zhan 2019;UNCTAD 2019, 133). Lower trade barriers, tax holidays or other forms of incentives are often used to entice domestic or foreign entrepreneurs to pursue economic activity within the zone.…”

Effects of entrepreneurial orientation and external business environment on entrepreneurial intentions of STEM students in Nigeria

“…The (Agbonlahor, 2016;Hoppe, 2016;Bischoff et al, 2018;Byun et al, 2018). Other pieces of literature view the entrepreneur's external business environment as the range of technical support/entrepreneurship infrastructure available to them, such as science parks (Parry, 2018;Xie et al, 2018;Audretsch & Belitski, 2019), incubators (Parry, 2018;Audretsch & Belitski, 2019), clusters (Ma & Zhou, 2017;Ogunjemilua et al, 2020), special economic zones (Ambroziak & Hartwell, 2018;Narula & Zhan, 2019), export processing zones (Sosnovskikh, 2017), free trade zones (Newman & Page, 2017;Liu et al, 2018). All these studies show that to a large extent, the external business environment influences the chances of success of a 'startup' or the entrepreneur, regardless of their innate abilities (Intra/entrepreneurial orientation).…”

Transnational education zones: Towards an urban political economy of ‘education cities’

“…Our conceptualisation of these peculiar transnational higher education spaces as zones consciously establishes a link to the expansive literature on special economic zones (SEZs). Free trade zones and SEZs have a long history but have generally been developed as an instrument to enable spatially selective exceptions to national legislation, for instance granting exemptions or reductions to tariffs and taxes, deregulated labour legislation or more favourable visa policy to attract foreign direct investments and spur export-led development (Narula and Zhan, 2019). Whereas they are traditionally often devised for labour-intensive manufacturing industries, such as textiles and manufacturing, some states deploy them in urban areas for digital services exports (see Easterling, 2014;Kleibert, 2018).…”