Imitation or learning: Exploring the drivers of Special economic zones

Abstract

This paper aims to explore how European governments approach the diffusion of Special Economic Zones besides the other types of Incentive Zones (Free Trade Zones, Free Zones and Free Ports) by examining whether they engage in comprehensive planning and programming or simply replicate policies based on the reputation of early adopters. The authors propose two reasons for adopting industrial policies: imitation, which involves replicating actions from other countries based on their economic or institutional status, and innovation, which entails adopting policies after carefully analysing their specific impacts. Results show that policymakers approach Incentive Zones establishment in a non-optimal way, that is, through a blind replication of policies already implemented in other countries showing a robust economic performance and a sound institutional background.