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Economic zones and local income inequality

Evidence from Indonesia

Bibliographic Data

ID12836780
AuthorsCecília Hornok (0000-0001-5680-3206, Kiel Institute for the World Economy, corresponding author), Dewa Gede Sidan Raeskyesa (0000-0002-3455-5229, Vienna University of Economics and Business)
Year2023
Volume22
Issue1
Pages69-100
Publication date2023-05-31
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Journal of Economic Inequality (JOURNAL)
Journal identifiersISSN: 1569-1721 • E-ISSN: 1573-8701
PublisherSpringer Science+Business Media (PUBLISHER • DE)
DOI10.1007/s10888-023-09581-x
OpenAlexW4378905208
LanguageEN
Citations received5
References cited44

Economic zones can be powerful drivers of economic growth in developing countries. However, less is known about their distributional impact on the local society. This paper provides empirical evidence from Indonesian provinces on the relationship between economic zones and within-province income inequality. We apply fixed-effects panel estimation to province-level data for the whole of Indonesia, which we then complement with separate studies on the opening of three economic zones in three provinces using the synthetic control method. The results suggest that the above relationship is positive overall. The estimated rise in income inequality after a zone opens is, however, relatively small on average and may be short-lived. Moreover, the average estimate masks large regional differences, which suggests that the inequality implications of economic zone policies depend on local conditions. One possible explanation for the rise in inequality is that the unskilled population benefits disproportionately less from the policy

Demographic economics · Development economics · Econometrics · Economic inequality · Economics · Estimation · Income distribution · Indonesian · Inequality · Panel data · Population · Economic Zones and Regional Development · Fiscal Policy and Economic Growth · Regional Economics and Spatial Analysis

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Unique citing works5
Citations per year2,5
Citation span2024 - 2026 (3)
Citation velocitycurrent
Highly citedNo
Citation typesNeutral: 5

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