Evolution of Free Economic Zones: A Functional Taxonomy
Journal Title: Archives of Business Research - Year 2017, Vol 5, Issue 11
Abstract
This study investigates the evolution of Free Economic Zones (FEZs) using the functional criteria. The methodology of the study involved analysis of the literature. The study makes five main revelations. First, the evolution of FEZ is in general consistent with theory of city life-cycle that states that a city will undergo different stages such as birth, growth, flourishing and decline. And at each stage there are several specific challenges concerning its industrial structure, enterprise structure, spatial structure and so on. Second, the study identifies five evolutionary phases of FEZs which are: Free Trade Zones, Export Processing Zones, Science Industrial Parks, Service Economic Zones and Special Economic Zones; each of these basic zones contain several variants. Third, as the typical FEZs evolve they change the focus of their functions both vertically and horizontally. In vertical terms the zones change the focus of their activities from trade related to manufacturing of the traded goods. In horizontal terms the zones expand their scope by embracing more sectors such as services, science and residential issues. Fourth, there is a progressively stronger orientation toward technology and skill intensive manufacturing and services. Fifth, FEZs are attractive to investors because of the existence of policy failures in the greater host economy: as policy reforms happen investors will see no need for staying in the FEZs and the relative significance of FEZs in economic terms can be expected to decline; at this point FEZ and non-FEZ firms would be treated equally. These findings lead to two general guidelines for sustainable zone development in a developing country context. First, policy makers should start by encouraging trade-intensive FEZ activities in the zones, followed by labor-intensive manufacturing; later on upgrade to technology- and skill-intensive manufacturing and services. Second, policy makers should encourage FDI in industries in which the country has comparative advantage; this increases the likelihood that development will be sustained long after FEZ incentives are removed and all firms are being treated equally in an economy.
Authors and Affiliations
Edward E. Marandu, Paul T. Mburu, Donatus Amanze
Keywords
Related Articles
- EP ID EP314237
- DOI 10.14738/abr.511.3845.
- Views 52
- Downloads 0
Sukuk Bond In Pakistan: An Analysis Of Islamic Mode Of Financing For Investors
Banking and financial system in an economy acts as blood circulation in body. Just as effective and efficient blood circulation ensures healthy and sound body similarly strong banking and financial system ensures economi...
Workforce Big Data Analytics and Production Efficiency: A Manager’s Guide
The study investigates the use of workforce big data analytics as a tool to guide production managers to boost production efficiency while also ascertaining the level of awareness in the use workforce analytics amongst p...
Revival of “Dollar Diplomacy” As United States Foreign Economic Policy in 2017: Tradeoffs Exchanged to Maintain Trade and Restore Peace Along the Tottering Western Pacific Rim
Background, Objectives and Goals: From their auspicious meeting at the “Southern” White House, Mar-a-Lago, West Palm Beach, Florida on 5-6 April 2017, U.S. President Donald J. Trump and China’s President Xi Jinping seem...
Stress Management Strategies: An Approach for Productive Employee Performance in the Nigerian Banking Organizations a Survey of Commercial Banking Firms in Nigeriaa
The objective of the study is to determine the impact of stress management strategies on the performance output in the commercial banking organization in Nigeria. The population of the study comprises of all the operatio...
Emotional Intelligence And Leadership Competencies: A Study Of Ministry Of Works, Owerri
The study examined Emotional Intelligence and Leadership Competencies: A Study of Ministry of Works, Owerri. In conducting the study, descriptive survey approach was adopted and data was generated from a five point liker...