The Influence of Special Economic Zones on Local Finances: An Analysis of the Polish Case.
PENSEE, Vol 75, no 12, Dec 2013
14 Pages Posted: 27 Jan 2014
Date Written: January 25, 2014
Abstract
The influence of Special Economic Zones (SEZ) on the host country’s economy has been studied for several decades now. A great number of theoretical papers using models to demonstrate SEZ importance for local development have been produced. However, purely empirical studies utilising the available data to capture SEZ significance for local economies are scarce and mostly refer to China. Theoretical analyses show that SEZ firms do exert influence on the economy, but empirical measurements are difficult for the diversity of their effects. In this article, the case of Poland is studied to demonstrate that a SEZ is another element increasing municipal incomes, so its influence on regional development is positive too. Municipal incomes should be understood as taxes contributed by taxpayers dependent on the activity of SEZ firms. Their sources as selected for this analysis are corporate income tax (CIT), personal income tax (PIT) and real property tax. The structure of the impacts of SEZ firms has been reduced to several variables that have a bearing on the financial system of the State. Other factors addressed in the theoretical discussion, however important, do not always affect the real economy. There are also many cases when model builders assume that a SEZ exerts influence on the economy, but fail to provide a formula for its measurement. As proven by the statistical analysis below, a SEZ has a statistically significant effect on particular tax incomes paid to the budget of the host municipality.
Keywords: special economic zones, efficiency, local governmet earnings
JEL Classification: H25, H21, H30, H11
Suggested Citation: Suggested Citation