Selecting the Best Location
At a Glance
- SEZs tend to perform better if the location has some existing industry, if agglomeration offers access to trade infrastructure, or has a natural competitive advantage.
- Without a natural spatial advantage (conditioned by production and transportation cost efficiencies) downstream production will be determined by the usual competitive drivers – e.g. cost of labor, capital, and utilities, etc.
- Location should be chosen based on the quantity, quality, and price of critical factors of production: land, labor, utilities, business services, and international connectivity. The combination of these factors, along with considerations of potential for environmental impacts, contribute to the competitive advantage of an SEZ, and to its level of attractiveness to investors.
Selecting the best location(s) is an iterative process with many variables to consider. If the government is contributing land to the SEZ then it must own it already, or a budget needs to be determined before a location is selected. Both avenues may narrow the search. Land acquisition for Indian SEZs has been problematic, in part due to who was compensated (and who was not). In 2007 this led to violent protests.
- SEZs in Select Countries: A Comparison with India (Tanu M Goyal,Saubhik Deb, Arpita Mukherjee, Parthapratim Pal, Subhobrota Ray)
- China's Special Economic Zones: An Analysis of Policy to Reduce Regional Disparities (Chad Albrecht, Conan Albrecht, Bret Crane, Kristopher McKay Duffin,)
- Special Economic Zones & Development: Geography and Linkages in the Indian EOU Scheme (Andrew Cheesman)
This paper introduces the need to consider regional economic disparity as a location for an SEZ is chosen. The paper proposes a possible ...
This resource provides an overview and examples of things to consider when choosing a location for an Special Economic Zone. Of particular ...
This resource explores India's Export-Oriented Unit (EOU) scheme and its contributions to recent structural transformation. The EOUs are ...