R30 - Real Estate Markets, Spatial Production Analysis, and Firm Location: GeneralReturn

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Why do Some Special Economic Zones Attract More Firms than Others? Panel Data Analysis of Polish Special Economic Zones

Piotr Ciżkowicz, Magda Ciżkowicz-Pękała, Piotr Pękała, Andrzej Rzońca

Prague Economic Papers 2021, 30(1):61-89 | DOI: 10.18267/j.pep.763

Using a unique firm-level data for Polish Special Economic Zones (SEZ) to estimate a set of panel data models we find that both employment and investment growth in SEZ are driven mainly by labour market characteristics of zone-hosting regions, while other factors (including market access, zone business climate and firms' concentration) play a less important role. Firms choose their locations based on labour availability rather than on labour costs. Moreover, they pay particular attention to availability of low-skilled rather than high-skilled labour. As far as tax incentives are concerned, their predictability matters more for SEZ development than their generosity.