The economic impact of Foreign Trade Zones: Evidence from the United States
| Thesis title in Czech: | Ekonomický dopad zón zahraničního obchodu: Případ USA |
|---|---|
| Thesis title in English: | The economic impact of Foreign Trade Zones: Evidence from the United States |
| Key words: | Zóny zahraničního obchodu, ekonomický dopad, prostorová nerovnost, osvobození od daně |
| English key words: | Foreign Trade Zones, economic impact, spatial inequality, tax exemption |
| Academic year of topic announcement: | 2023/2024 |
| Thesis type: | Bachelor's thesis |
| Thesis language: | angličtina |
| Department: | Institute of Economic Studies (23-IES) |
| Supervisor: | PhDr. Miroslav Palanský, Ph.D. |
| Author: | hidden - assigned by the advisor |
| Date of registration: | 25.06.2024 |
| Date of assignment: | 25.06.2024 |
| References |
| Beenhakker, A., & Damanpour, F. (1992). Globalization of foreign trade zones: the case of the united states. the International Trade Journal/theInternational Trade Journal, 7(2), 181–204. https://doi.org/10.1080/08853909208523761
Foreign-Trade zones in the southeastern United States on JSTOR. (n.d.). www.jstor.org. https://www.jstor.org/stable/26912606 Grant, M. (2020). Why Special Economic Zones? Using Trade Policy to Discriminate across Importers. The American Economic Review, 110(5), 1540–1571. https://www.jstor.org/stable/26921591 Seyoum, B. (2017). US foreign trade zones and import intensity examining determinants of import intensity in US foreign trade zones. European Business Review, 29(1), 103–122. https://doi.org/10.1108/ebr-06-2016-0072 Ward, M., & Gleditsch, K. (2008). Spatial regression models. In SAGE Publications, Inc. eBooks. https://doi.org/10.4135/9781412985888 |
| Preliminary scope of work in English |
| Research question and motivation
Foreign Trade Zones (FTZs) in the United States represent a specialized category of special economic zones designed to stimulate economic growth by providing benefits such as duty exemptions and reduced regulations. Their numbers have been steadily increasing, reflecting a growing interest in their potential to boost local economies. However, the effectiveness of FTZs remains a subject of debate. On one hand, proponents argue that FTZs foster economic development by attracting investment, lowering unemployment rates, and enhancing competitiveness (Sun and Cao, 2021). On the other hand, critics raise concerns about their unintended consequences, particularly the risk of exacerbating regional economic disparities (Cheng et al., 2020). Recent studies, such as the one by Jesse M. Lane (2020), suggest that while FTZs are indeed associated with increased economic output, they may also contribute to widening the gap between affluent and less affluent regions. Specifically, Lane's findings indicate that FTZs could exacerbate spatial inequality and deepen economic disparities within and between counties. This raises important questions about whether FTZs truly fulfill their intended goals of inclusive economic growth or if they inadvertently concentrate wealth and opportunity in certain areas, leaving others behind. Given these conflicting perspectives, this thesis is motivated by the need to thoroughly examine the actual impact of FTZs on regional economies in the United States. By focusing on the county level, this research aims to shed light on the different effects of FTZs, exploring not only their potential to drive economic growth but also their role in shaping income distribution and unemployment patterns across different regions. This analysis will provide valuable insights for policymakers and stakeholders who seek to understand the broader implications of FTZs and to optimize their benefits for all regions involved. Expected contribution While the effectiveness of FTZs in stimulating economic growth is an argued topic, the literature lacks empirical studies on their regional economic impacts within different regions. Although the impact from the firms level is empirically well studied topic, impact of the trade zones on the households lacks comprehensive empirical studies within the whole world including the U.S. My thesis will expand the findings from southeastern region from Lane (2020) to all U.S. counties. The findings of this study could help deepen the understanding of the FTZs and be used further for enhancing economic policies concerning the optimization of the FTZ’s benefits. Methodology I will utilize quantitative methods to compare counties in the United States with and without Foreign Trade Zones (FTZs) in 2022. My analysis will control for key factors such as income levels, unemployment rates, and housing values, and will assess the regional impacts of FTZs throughout the spatial regression model similar to the approach described by Lane (2020). The primary data sources include the U.S. Census Bureau and economic reports from the Foreign-Trade Zone Board. Outline Introduction Background and literature review Methodology Data Empirical results Conclusion |