Does the pilot free trade zone policy increase regional innovation ability? Evidence from China

ABSTRACT

As an important national strategy, China’s pilot free trade zone (FTZ) policy has attracted many international enterprises, which may yield technology spillover effects. Therefore, it is of great importance to examine the impact of FTZ policy on China’s innovation. Using panel data from 282 prefecture-level cities from 2010 to 2020, this article investigates the influence of FTZ policy on regional innovation ability through a difference-in-differences (DID) approach. The results indicate that FTZ policy significantly promotes regional innovation. Moreover, no additional effects were found in innovation ability for cities that previously joined the Coastal Open City (COC) policy or those that recently joined the FTZ policy. Therefore, the Chinese government should further optimize the FTZ policy and utilize its welfare effects.

KEYWORDS:

• FTZ policy
• regional innovation
• DID
• invention patent granted

JEL CLASSIFICATION:

• C54
• F14
• O24

Acknowledgements

The authors would like to thank Jiangsu Ocean University for the support received.

Disclosure statement

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

Additional information

Funding

This work was supported by the Project of Philosophy and Social Science Research in Colleges and Universities in Jiangsu Province (2022SJYB1836), and the Postgraduate Scientific Research and Practice Innovation Program by Jiangsu Ocean University (KYCX2023-86).