The Impact of the Establishment ofNational High-tech Zones on Total FactorProductivity of Chinese Enterprises

Wang Mingyi, and Liu Xiaoyu*

School of International Trade and Economics, Shandong University of Finance and Economics, Jinan, China

Abstract: The National High-tech Zone (NHTZs) is an important strategic platform forcultivating high-tech industries and realizing high-quality economic development in China.Based on the combined data from 2006 to 2014 of the industrial enterprise database, thecustoms database, and the China Development Zones Audit and Announcement Catalogue(abbreviated asthe Catalogue), this paper systematically investigates the influence of theconstruction of NHTZs on enterprise’s total factor productivity (TFP). Results show thatNHTZs have a positive impact on the TFP of enterprises in the zone, and this conclusionis still valid after considering endogeneity problems. Furthermore, the above productivityeffects of NHTZs are heterogeneous in terms of enterprise ownership, external environmentand establishment time, and NHTZs have greater stimulation effects on enterpriseproductivity after comparing with other types of functional zones. An investigation of thespecific mechanisms at play shows that NHTZs promote the TFP of enterprises in the zonethrough the release of preferential policies, strengthening the “technology spillover effects”of imported intermediate goods, enhancing enterprise’s innovation ability and attractingtalent. In addition, based on the decomposition of industry productivity, this paper alsoinvestigates the impact of NHTZs on changes in industry productivity and finds that NHTZspromote the overall productivity of specific industries mainly by stimulating the productivityimprovement of incumbent enterprises and expanding the market share of high-productivityenterprises. Moreover, the preferential policies of NHTZs do not significantly stimulate highproductivityenterprises to enter the zones, nor do they cause low-productivity enterprises toexit. This research is helpful in objectively evaluating the economic effects of the NHTZs inChina and in providing a theoretical basis for its further adjustment.

Keywords: National High-tech Zones (NHTZs), total factor productivity (TFP),

JEL Classification Code: D24, O25

DOI: 10.19602/j.chinaeconomist.2023.05.04