Development zone policy and high-quality economic growth: quasi-natural experimental evidence from China

ABSTRACT

Improving total factor productivity (TFP) promotes high-quality development. This study estimates the TFP of 284 cities in China for the period 2006–18, and constructs a time-varying difference-in-differences (DID) model of the impact of national development zones (DZs) on regional TFP. The findings are as follows: (1) although DZs improve economic performance, they have not created high-quality growth; (2) despite heterogeneous effects on high-quality development, the overall effect remains negative; and (3) the suppression effect is greater in central and western than in eastern cities, and in underdeveloped than in developed cities. Finally, policies should consider the quality of growth, and a framework of classified policy instruments is needed.

KEYWORDS:

• national development zones
• total factor productivity
• time-varying difference-in-differences
• heterogeneity test

JEL:

• O25
• P25
• R11
• R58

ACKNOWLEDGEMENTS

The authors thank the referees as well as discussion group members of Feiguang and PaperExpress (WeChat Platform) for their helpful comments, constructive criticisms and suggestions, which improved the paper overall. All remaining errors are solely attributable to the authors.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Additional information

Funding

This study was supported by the National Research Program of Statistical Science, ‘Research on the Indicators and Appraisal of Environmental Risks in Industrial Distribution’, under the Strategy of Beijing–Tianjin–Hebei Integration [grant number 2016435].