Do Place-Based Policies Work? Micro-Level Evidence from Chinas Economic Zone Program

Exploiting two geo-coded \u85rm censuses, this paper examines the impact of Chinas Special Economic Zones on economic activity in the targeted areas. We \u85nd that eco-nomic zones have a positive e¤ect on employment, output and capital, and increase the number of \u85rms. We also \u85nd that \u85rm births and deaths play a larger role in explain-ing the zonese¤ects than incumbents and relocations. Finally, a zones e¤ectiveness depends on a programs features. Capital-intensive industries exhibit larger positive zone e¤ects than labor-intensive ones. Location characteristics such as market poten-tial and transportation accessibility are not critical factors in enhancing the program e¤ects