Administrative Rank,Preferential Policies And Economic Growth

It is evident that development zone has played a significant role in promoting the development of local economy in China.However,what is well ignored in the literature is that the political system of development zones is composed of two layers of stated administration,namely the provincial-level and the national-level.Compared with the provincial development zones,the national development zones have more advantages in attracting foreign investment,developing export-leading economy and high-tech industries.So,is there any difference in the improving the local economic growth between the national and provincial development zones?There is not a clear answer to this question yet.In 2009,China restarted the upgrading of provincial development zones to national development zones,which is regarded a good natural experiment for us to identify the different policy effects of the two layers of development zones.We constructs a panel data of 566 development zone at the city level from 2006 to 2014,including per capita gross domestic product(GDP),above-scale industrial output,population,and so on.Then,we use the difference-in-difference(DID)and propensity matching score(PSM)methods to evaluate the effects of this upgrading policy to the local economic growth.Using the DID method,the results show that,the per capita GDP,above-scale industrial output and total factor productivity(TFP)can be promoted by 5%、9.04%and5.65%respectively after the provincial development zones upgrading to national development zone.Using the DID-PSM method,the treatment effects of the upgrading policy for the same outcome variable increase 7.71%、22.7%and 9.16%respectively.In addition,we also found that there are certain regional differences in the effects of the upgrading policy.We divide the total sample into two sub-samples,namely east sub-sample and mid-west sub-sample.The findings of the eastern sample show that the upgrading of provincial-level development zones can promote per capita GDP、above-scale industrial output and total factor productivity(TFP)to increase by.4.33%、7.63%and 4.22%respectively.The corresponding results of the mid-west sub-sample are 5.55%、13.1%and 5.38%.the results are robustness.in summary,the results of this studies show that the effect of national development zones on local economic development is significantly larger than that of provincial development zones.