Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2016-04-01
Number: 16-021/VIII
Author-Name: Hans Koster
Author-Workplace-Name: VU University Amsterdam, the Netherlands, and London School of Economics, United Kingdom
Author-Name: Fang Fang Cheng
Author-Workplace-Name: Utrecht University, the Netherlands
Author-Name: Michiel Gerritse
Author-Workplace-Name: University of Groningen, the Netherlands
Author-Name: Frank van Oort
Author-Workplace-Name: Erasmus University Rotterdam, and Utrecht University, the Netherlands
Title: Place-based Policies, Firm Productivity and Displacement Effects:  Evidence from Shenzhen, China
Abstract: We analyse the economic impacts of place-based policies that aim to enhance economic development by stimulating growth and productivity of firms in designated areas. We use unique panel data from China with information on manufacturing firms’ production factors, productivity and location, and we exploit temporal and spatial variation in place-based interventions due to the opening of science parks in the metropolitan area of Shenzhen. The identification strategy enables us to address the issues that (i) science parks are located in favourable locations and that (ii) high-productivity firms sort themselves in science parks. We find that productivity is approximately 15-25 per cent higher due to the policies. The results also show that local wages have increased in science parks. Weaker evidence suggests that displacement effects are sizeable.
Classification-JEL: H2, R3, R5
Keywords: place-based policies, transitional economies, science parks, productivity
File-Url: https://papers.tinbergen.nl/16021.pdf
File-Format: application/pdf
File-Size: 1448096 bytes
Handle: RePEc:tin:wpaper:20160021