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- Making Strategic Choices
- Selecting the Best Location
Selecting the Best Location
At a Glance
- SEZs tend to perform best where there is already an industrial agglomeration and access to trade infrastructure.
- Without a natural spatial advantage (conditioned by production and transportation cost efficiencies) downstream production will be determined by the usual competitive drivers such as cost of labor, capital, and utilities.
- When looking to set up an SEZ, policy makers would do well to consider the quantity, quality, and price of critical factors of production: land, labor, utilities, business services, and international connectivity.
Case Studies
- China's Special Economic Zones: An Analysis of Policy to Reduce Regional Disparities (Chad Albrecht, Conan Albrecht, Bret Crane, Kristopher McKay Duffin)
- SEZs in Select Countries: A Comparison with India (Tanu M Goyal,Saubhik Deb, Arpita Mukherjee, Parthapratim Pal, Subhobrota Ray)
- Special Economic Zones & Development: Geography and Linkages in the Indian EOU Scheme (Andrew Cheesman)
Key Resources
Topic Briefing
Selecting the best location (or locations) for an SEZ is an iterative process with many variables to consider. For a government to contribute land to an SEZ, either the government must already own the land, or a budget needs to be determined before a location is selected. Land acquisition can be problematic; for example, violent protests erupted in India in 2007 due to objections over who was compensated (and who was not) during the land acquisition process for several SEZs.[1]