Monday, 20 February, 2023 | 14:00 | Applied Micro Research Seminar

Boryana Madzharova (Friedrich-Alexander-Universität Erlangen-Nürnberg) "Poland’s Special Economic Zones: Effects on Regional Economic Development"

Boryana Madzharova, Ph.D.

Friedrich-Alexander-Universität Erlangen-Nürnberg, Germany

Join online:  (password 5949)

Abstract: This paper studies one of the largest place-based policies currently operational within the European Union – Poland’s special economic zones (SEZs). The policy attracts investors to specific locations through corporate income tax exemptions amounting to up to 70% of investment costs. Using a unique combination of firm and municipality-level data, we evaluate employment outcomes in an event-study specification with staggered adoption spanning 1995-2016. We estimate a longrun increase in employment in targeted municipalities of 26%, predominantly reflecting gains in manufacturing jobs. The mean effect of one more permit issued to an investor operating in an SEZ is 1.5%. Indirect effects on contiguous non-treated communes are modest and appear only a decade post-zone establishment. We find no impact of the policy on within-country migration, wages or property prices.