Governance of special economic zones and their performance: evidence from poland

Abstract

Objective: The objective of the article is to assess why some zone managing companies (ZMCs) are more successful in developing their special economic zones (SEZs) than others. In almost every part of Poland, there are winners and losers among SEZs. It suggests that the advantage of having a better zone location is relative, and other factors may play a role. The specific research question addressed in this article is whether the individual zone administrations matter. Research Design & Methods: We used cluster and correlation analysis and estimated regression models at the level of ZMCs to explain the relative performance of SEZs in Poland over the period 2004-2018. The set of explan-atory variables, treated as a proxy for ZMC’s efforts, were regressed on investment outlays and jobs created. Findings: (1) location is the principal determinant of SEZs performance; (2) zone governance also makes a difference; (3) among ZMCs’ efforts promotional activities and infrastructural outlays impact SEZs performance to the greatest extent. Implications & Recommendations: Zone performance depends predominantly on its location but effective governance exercised by the operator matters, too. Both conclusions advocate opting for a zone policy that limits the centralising of decision-making powers. First, regional/local authorities must be more engaged. Sec-ond, and more importantly, additional powers and resources should be delegated to zone operators. Contribution & Value Added: The use of a regression model to explain the role played by zone operators in zones’ performance is very scarce in economic literature. There is no such a study for Poland. Our research tries to fill this gap. We check (1) whether good administration is important for the success of a SEZ and (2) why it is important: due to the resources ZMC has or rather due to the services it provides for investors.