Development zones and local economic growth: zooming in on the Chinese case

- Investigates whether development zones have significantly contributed to local economic developments in China.
- Indicates that development zones, even though positive in developed regions, do not contribute to local economic growth on the whole.
- Reveals a positive and significant relationship between local industrial output and the use of economic development zones in county-level and district-level of Guangdong Province.

The practice of development zones has expanded worldwide, yet scholarship persistently disagrees on the role that development zones play in local economic development. With its focus on China, this study contributes to the discussion by exploring the effects of development zones on the economic development of host regions, using both macro-level (all national-level development zones) and meso-level (county- and district-level development zones in Guangdong Province) analyses. Our data analyses of the macro-level reveal that development zones, even though positive in developed regions, do not contribute to economic growth in proportion to their share of land in host cities on the whole. The result is confirmed by the meso-level data analysis that indicates that county- and district-level development zones in Guangdong Province, a developed region in southern China, imposed positive effects on local economies. Therefore we suggest that the Chinese central government should not expand development zones without limits, but carefully consider their location and size in relation to the host regions before approving them.