Study On Economic Growth Effect Of Pilot Free Trade Zone

In the background of economic globalization and regional economic integration,countries around the world have set up free trade zones to strengthen foreign trade and economic exchanges.In this context,the CPC Central Committee and the State Council decided to set up China's Shanghai Free Trade Experimental Zone on August 22,2013.One year later,the CPC Central Committee and the State Council decided to set up China(Guangdong)Free Trade Experimental Zone,China(Tianjin)Free Trade Experimental Zone,China(Fujian)Free Trade Experimental Zone on December 12,2014,After the founding of the free trade area,the local government implement the transformation of government functions,deepen the financial system innovation,improve trade facilitation,investment facilitation and take other measures to promote the local economic growth.Most of the domestic scholars use free trade area theory and customs union theory to explain the impact of free trade area on economic growth and few do it from the qualitative point of view.In this paper,this essay use not only the economic theory related to the FTA but also employs counterfactual analysis approach to evaluate the economic growth effect of the foundation of Free Trade Zone on the economic growth.The data is the industrial added value year on year growth rate and total import and export growth rate of 31 provinces or autonomous regions from February 2006 to February 2016.Use the data to select the best control group which explain the industrial added value growth rate or total import and export growth rate of treatment province or city best,and then use the control group to do out-of-sample forecast to evaluate the economic growth effect of the foundation of Free Trade Zone.Compare the predicted value and the actual value gets the treatment effect.Finally,it can tell whether the economic growth effect of the foundation of Free Trade Zone is positive or negative.The results of the empirical study show that the establishment of Shanghai,Xiamen and Guangzhou Free Trade Area has a significant positive effect on the industrial value added of local city.The establishment of Tianjin Free Trade Area has a significant negative stimulus to Tianjin's industrial value added.The establishment of Xiamen,Guangzhou Free Trade Area showed a significant positive stimulus effect to the total import and export of local city,and Shanghai,Tianjin FTA's treatment effect on the local total import and export is not significant.