Governance of special economic zones and their performance: Evidence from Poland

Abstract

Objective: The objective of the article is to assess why some zone managing companies (ZMCs) are more successful in developing their special economic zones (SEZs) than others. In almost every part of Poland, there are winners and losers among SEZs. It suggests that the advantage of having a better zone location is relative, and other factors may play a role. The specific research question addressed in this article is whether the individual zone administrations matter.

Research Design & Methods: We used cluster and correlation analysis and estimated regression models at the level of ZMCs to explain the relative performance of SEZs in Poland over the period 2004-2018. The set of explanatory variables, treated as a proxy for ZMC’s efforts, were regressed on investment outlays and jobs created.

Findings: (1) location is the principal determinant of SEZs performance; (2) zone governance also makes a difference; (3) among ZMCs’ efforts promotional activities and infrastructural outlays impact SEZs performance to the greatest extent.

Implications & Recommendations: Zone performance depends predominantly on its location but effective governance exercised by the operator matters, too. Both conclusions advocate opting for a zone policy that limits the centralising of decision-making powers. First, regional/local authorities must be more engaged. Second, and more importantly, additional powers and resources should be delegated to zone operators.

Contribution & Value Added: The use of a regression model to explain the role played by zone operators in zones’ performance is very scarce in economic literature. There is no such a study for Poland. Our research tries to fill this gap. We check (1) whether good administration is important for the success of a SEZ and (2) why it is important: due to the resources ZMC has or rather due to the services it provides for investors.

Keywords

speical economic zones, zone managing companies, investment policy, Poland

Author Biography

Tomasz Dorożyński

Associate Professor at the Department of International Trade, University of Lodz. His research work focuses on the internationalization of firms, FDI, investment incentives, special economic zones, and regional development.

Correspondence to: dr hab. Tomasz Dorożyński, prof. UŁ, Department of International Trade, Faculty of Economics and Sociology, University of Lodz, 3/5 POW St., 90-255 Łódź, Poland, e-mail: tomasz.dorozynski@uni.lodz.pl

Janusz Świerkocki

Full Professor at the Department of International Trade, University of Lodz. His current research relates to the internationalisation of firms, regional development, international trade policy, FDI, and special economic zones.

Correspondence to: Prof. dr hab. Janusz Świerkocki, Department of International Trade, Faculty of Economics and Sociology, University of Lodz, 3/5 POW St., 90-255 Łódź, Poland, e-mail: janusz.swierkocki@uni.lodz.pl

Bogusława Dobrowolska

Assistant Professor at the Department of Economic and Social Statistics, University of Lodz. Her scientific interests include the application of statistical methods in economic and social research.

Correspondence to: dr Bogusława Dobrowolska, Department of Economic and Social Statistics, Faculty of Economics and Sociology, University of Lodz, 3/5 POW St., 90-255 Łódź, Poland, e-mail: boguslawa.dobrowolska@uni.lodz.pl

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