A dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP

We propose a simple-to-implement dynamic panel data method to evaluate the impacts of place-based policies. The idea is to exploit both the cross sectional dependence and the serial correlation within a panel and implement a semi difference-in-difference decomposition. Different from the method by H...

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Autores principales: Jun Cai, Kai Xin, Yahong Zhou
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Lenguaje:EN
Publicado: KeAi Communications Co., Ltd. 2021
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Acceso en línea:https://doaj.org/article/c0658d3987964b009302584e2a69bbdf
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spelling oai:doaj.org-article:c0658d3987964b009302584e2a69bbdf2021-11-10T04:24:40ZA dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP2096-232010.1016/j.jmse.2021.06.004https://doaj.org/article/c0658d3987964b009302584e2a69bbdf2021-09-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S209623202100041Xhttps://doaj.org/toc/2096-2320We propose a simple-to-implement dynamic panel data method to evaluate the impacts of place-based policies. The idea is to exploit both the cross sectional dependence and the serial correlation within a panel and implement a semi difference-in-difference decomposition. Different from the method by Hsiao et al. (2012), the proposed model is easy to implement statistical inferences and can incorporate multiple treated groups at different time thresholds. We use the proposed method to explore the effect of the Free Trade Zone (FTZ) policy implemented in Shanghai at the end of 2013 on local GDP growth rate and compare it with that from Hsiao et al. (2012). The empirical results show that the FTZ does have a positive effect on the local GDP growth rate and it adds 1.2−1.8 percent point to the growth rate of the GDP per capita for Shanghai in 2014 which is about one fourth to one third of the total GDP growth rate per capita. This effect largely comes from the growth of the tertiary sector. The results lend support to the duplication of FTZ policy to other cities and provinces in China.Jun CaiKai XinYahong ZhouKeAi Communications Co., Ltd.articleDynamic panel modelDifference-in-DifferenceFree trade zoneGDP growthTreatment effectIndustrial engineering. Management engineeringT55.4-60.8ENJournal of Management Science and Engineering, Vol 6, Iss 3, Pp 249-267 (2021)
institution DOAJ
collection DOAJ
language EN
topic Dynamic panel model
Difference-in-Difference
Free trade zone
GDP growth
Treatment effect
Industrial engineering. Management engineering
T55.4-60.8
spellingShingle Dynamic panel model
Difference-in-Difference
Free trade zone
GDP growth
Treatment effect
Industrial engineering. Management engineering
T55.4-60.8
Jun Cai
Kai Xin
Yahong Zhou
A dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP
description We propose a simple-to-implement dynamic panel data method to evaluate the impacts of place-based policies. The idea is to exploit both the cross sectional dependence and the serial correlation within a panel and implement a semi difference-in-difference decomposition. Different from the method by Hsiao et al. (2012), the proposed model is easy to implement statistical inferences and can incorporate multiple treated groups at different time thresholds. We use the proposed method to explore the effect of the Free Trade Zone (FTZ) policy implemented in Shanghai at the end of 2013 on local GDP growth rate and compare it with that from Hsiao et al. (2012). The empirical results show that the FTZ does have a positive effect on the local GDP growth rate and it adds 1.2−1.8 percent point to the growth rate of the GDP per capita for Shanghai in 2014 which is about one fourth to one third of the total GDP growth rate per capita. This effect largely comes from the growth of the tertiary sector. The results lend support to the duplication of FTZ policy to other cities and provinces in China.
format article
author Jun Cai
Kai Xin
Yahong Zhou
author_facet Jun Cai
Kai Xin
Yahong Zhou
author_sort Jun Cai
title A dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP
title_short A dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP
title_full A dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP
title_fullStr A dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP
title_full_unstemmed A dynamic panel data approach and HCW's method: Assessing the effect of China (Shanghai) Free Trade Zone on local GDP
title_sort dynamic panel data approach and hcw's method: assessing the effect of china (shanghai) free trade zone on local gdp
publisher KeAi Communications Co., Ltd.
publishDate 2021
url https://doaj.org/article/c0658d3987964b009302584e2a69bbdf
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