Place‐based policies, firm productivity, and displacement effects: Evidence from Shenzhen, China

2018/11/19 by Hans Koster, Hans R.A. Koster, Fang Fang Cheng +4
Economics, Econometrics and Finance · Social Sciences · #Regional Economics and Spatial Analysis #Fiscal Policy and Economic Growth #Urban Transport and Accessibility

paper · pdf · doi:10.1111/jors.12415

Abstract

Abstract Developing and transitional countries devote considerable funds to selected areas to stimulate local growth and firm productivity. We examine the impact of place‐based interventions due to the opening of science parks in Shenzhen, China, on firm productivity and factor use. Our identification strategy, exploiting spatial and temporal differencing in firm‐level data, addresses the issues that (a) the selection of science park locations is not random and (b) high‐productivity firms sort themselves into science parks. Firm productivity is approximately 15–25% higher due to the science park policy. The policy also increases local wages and leads to distortions due to job displacement.

Citations

• Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions
• THE CASE FOR REGIONAL DEVELOPMENT INTERVENTION: PLACE‐BASED VERSUS PLACE‐NEUTRAL APPROACHES*
• Growth in Cities

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