Impact of economic functional zones on regional economic development and underlying mechanisms: A case study of Changchun Jiutai Economic Development Zone, China

doi:10.1016/j.regsus.2026.100389

Abstract

Abstract:

Economic development zones (EDZs) are an important policy instrument for promoting local economic growth and spatial restructuring. Taking the Changchun Jiutai Economic Development Zone (hereafter referred to as Jiutai EDZ) as a case study, this paper used panel data from 2000 to 2022 to evaluate the effect of the establishment of Jiutai EDZ on regional economic development. First, the Synthetic Control Method(SCM) was used to construct a counterfactual trajectory for Jiutai District before the establishment of Jiutai EDZ and to assess the validity of the parallel trend assumption. A multi-control Difference-in-Differences (DID) model was then applied to estimate the net effect of the establishment of Jiutai EDZ. The results show that the establishment of Jiutai EDZ had a positive and statistically significant effect on regional economic growth, increasing gross regional product (GRP) by 25.60% compared with control counties and cities. The robustness of this finding is supported by timing placebo test. The analysis of underlying mechanisms indicates that the growth effect should not be explained simply by the expansion of fixed asset investment; instead, Jiutai EDZ mainly promoted economic growth by enhancing fiscal capacity, improving the conversion of development input, and expanding the local consumer market. Viewed from spatial and institutional aspects, Jiutai EDZ has strengthened the role of Jiutai District as an economic node within the Changchun Metropolitan Area and the Changchun-Jilin economic corridor. The integrated zone-township governance model has further facilitated spatial planning, infrastructure construction, and resource allocation. This study provides empirical evidence for understanding the economic effects, transmission mechanisms, and spatial-governance implications of provincial-level EDZs.

Key words: Economic development zones (EDZs), Synthetic Control, Method (SCM), Difference-in-Differences (DID), Changchun Jiutai, Economic, Development Zone (Jiutai EDZ), Regional economic, Spatial governance

DONG Yaojia, WANG Kaiyong, WANG Fuyuan, ZHAO Yicai. Impact of economic functional zones on regional economic development and underlying mechanisms: A case study of Changchun Jiutai Economic Development Zone, China[J]. Regional Sustainability, 2026, 7(5): 100389.

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Variable	Dependent variable (ln(GRP))
Variable	Model 1	Model 2	Model 3	Model 4
Treat×Post	0.256^*** (4.260)	0.267^*** (5.290)	0.243^*** (5.990)	0.129 (1.760)
IR		0.016^** (3.060)	0.016^** (2.990)	0.017^*** (8.060)
SR		0.013^* (2.100)	0.014^* (1.920)	0.013^** (3.220)
ln(FAI)			0.005 (0.110)	-0.012 (-0.340)
ln(GR)				0.210^* (2.300)
ln(FE)				-0.608^** (-2.940)
ln(TRS)				0.318^* (2.120)
Constant	3.044^*** (37.600)	2.224^*** (7.300)	2.259^*** (6.370)	2.032^*** (11.910)
Observations	184	184	184	184
R²	0.961	0.969	0.967	0.977
County (city) fixed effects	YES	YES	YES	YES
Year fixed effects	YES	YES	YES	YES

Variable	2001	2002	2006	2014
Pseudo DID	0.156^* (2.150)	0.132 (1.740)	0.098 (1.240)	0.358^*** (6.760)
IR	0.017^*** (8.230)	0.017^*** (8.140)	0.018^*** (7.810)	0.017^*** (7.060)
SR	0.013^** (3.140)	0.013^** (3.150)	0.014^** (3.320)	0.016^*** (5.550)
ln(FAI)	-0.016 (-0.420)	-0.014 (-0.380)	-0.011 (-0.280)	0.015 (0.560)
ln(GR)	0.215^* (2.350)	0.213^* (2.330)	0.206^* (2.180)	0.148^** (2.790)
ln(FE)	-0.603^** (-2.910)	-0.607^** (-2.930)	-0.580^** (-2.880)	-0.469^** (-2.740)
ln(TRS)	0.327^* (2.190)	0.322^* (2.160)	0.316^* (2.030)	0.256^* (2.070)
Constant	2.024^*** (12.030)	2.035^*** (12.010)	1.997^*** (11.800)	1.941^*** (11.240)
Observations	184	184	184	184
R²	0.977	0.977	0.977	0.981
County (city) fixed effects	YES	YES	YES	YES
Year fixed effects	YES	YES	YES	YES

Variable	ln(FAI)	IR	SR	ln(GR)	ln(FE)	ln(TRS)
Treat×Post	0.073 (0.210)	0.037 (0.010)	-1.524 (-0.730)	0.383^** (2.520)	0.107^* (2.280)	0.220^** (3.150)
Constant	13.436^*** (5.030)	-919.805^*** (-19.190)	30.124^*** (12.200)	-0.472^** (-2.650)	0.404^*** (5.980)	1.786^*** (39.260)
Observations	184	184	184	184	184	184
R²	0.944	0.806	0.617	0.944	0.993	0.966