The economic impact of special economic zones: Evidence from Thailand

Authors

  • Wannaphong Durongkaveroj Faculty of Economics, Ramkhamhaeng University, Bangkok 10240, Thailand

Keywords:

foreign direct investment, special economic zone, Thailand

Abstract

This paper examines Thailand’s establishment of Special Economic Zones (SEZs) on the local economy. The analysis is based on a panel data set covering 77 provinces over the period 2012–2020. Comparing the changes between the provinces that created a SEZ and those outside the zones, it was found that the SEZ program has not attracted significant levels of foreign investment into the zones. Difference-in-difference estimation is used to assess the difference in real gross provincial product per capita and poverty rate between SEZs and non-SEZs. The main results show that after implementing the SEZ policy in 2015, the provinces that established a SEZ do not achieve a significantly higher rate of economic growth compared to those outside the SEZs. In addition, progress in poverty reduction in SEZs is not better than that in non-SEZs. The results are consistent when estimating the model using a system GMM estimator to address endogeneity issue. These results point towards a lack of a favorable investment environment in the zones and fiscal incentives offered by the SEZ program as a driving factor behind the null effects.

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Published

20-06-2023

How to Cite

Durongkaveroj, W. . (2023). The economic impact of special economic zones: Evidence from Thailand. Kasetsart Journal of Social Sciences, 44(2), 377–386. Retrieved from https://so04.tci-thaijo.org/index.php/kjss/article/view/266250

Issue

Section

Research articles