Research on the policy effect of Free Trade Zone on regional innovation capability: evidence from China

ABSTRACT

Free Trade Zone Policy is one of China’ s new opening-up strategies developed in response to the changed domestic and international circumstances. This paper identifies the Free Trade Zone Policy not only has an impact on regional innovation, but also has spatial spillover effect. Based on the data of listed companies and the data of 268 prefecture-level cities in China from 2010 to 2019, the paper uses the Spatial Differences-in-Differences (SDID) model to prove that FTZ policy can promote regional innovation of local area and will also promote the growth of innovation in surrounding areas.

KEYWORDS:

• Free Trade Zone
• Spatial Differences-in-Differences Model (SDID)
• regional innovation
• spatio-temporal weight matrix
• China

Acknowledgments

The authors acknowledge their financial support from the National Natural Science Foundation of China (Grant No. 72063013) and the Graduate Innovation Fund of Jiangxi Province [YC2021–B115]. We also appreciate the anonymous reviewers for constructive comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [72063013]; the Graduate Innovation Fund of Jiangxi Province [YC2021–B115].