Is the special economic zone an effective policy tool for promoting polycentricity? Evidence from China

The special economic zone (SEZ) is an important place-based policy adopted by the Chinese government to simulate regional and urban growth, and existing studies mainly focus on the impacts of SEZs on local economic outcomes and productivity. This paper establishes the linkage between SEZ and urban spatial structure based on time-series nighttime light images spanning 2000 to 2020 in China. Through a set of time-varying difference-indifferences (DID) regressions at the county level, we find that the introduction of national SEZs has a significant negative impact on monocentricity, while provincial SEZs need to operate for 7 years before they have a substantial impact on spatial structure. However, the average effect masks great heterogeneity with respect to the characteristics and geographic location of zones. SEZs characterized by higher research and development (R&D) intensity, larger scale, and longer establishment duration have more pronounced effects on spatial structure. Geographically, the effects peak when SEZs are 5-15 km away from existing centers, and the effects of SEZs are mainly observed in urban areas and top-tier cities.