Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184836
Authors: 
Davies, Ronald B.
Desbordes, Rodolphe
Year of Publication: 
2018
Series/Report no.: 
Working Paper Series 18/07
Abstract: 
Export processing zones (EPZs) are an increasingly common type of special economic zone. They are designed to facilitate international trade by lowering trade costs, such as import duties and/or export taxes. EPZs should thus be particularly attractive locations for multinational enterprises engaging in vertical, trade-intensive, foreign direct investment (FDI). Using data on worldwide greenfield FDI projects over the period 2003-2014, we find patterns consistent with this hypothesis. EPZs have a large positive effect on manufacturing FDI projects with a production focus, especially in trade- and labour-intensive sectors. Overall, our results suggest that EPZs are an effective tool to attract manufacturing FDI which exploit the opportunities offered by global value chains.
Subjects: 
Export Processing Zone
Special Economic Zone
Greenfield FDI
Global Value Chain
JEL: 
F23
F13
Document Type: 
Working Paper
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