• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
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HOME > Archive > 2025 > Volume 13 Number 3 (2025) >
JOEBM 2025 Vol.13(3): 320-324
DOI: 10.18178/joebm.2025.13.3.886

How Does Undertaking Industrial Transfer Demonstration Zone Affect Firm-Level Total Factor Productivity? Evidence from China

Zixuan Liu 1 and Che Su2
1. School of Economics, Xinjiang University of Finance and Economics, Xinjiang 830012, China
2. School of International Law, Shanghai University of Political Science and Law, Shanghai 201701, China
Email: irenelzx@163.com(Z.X.L); chesu076@gmail.com (C.S.)
*Corresponding author

Manuscript received March 5, 2025; accepted June 2, 2025; published September 19, 2025.

Abstract—A two-way fixed effects model with the approach of multi-period Difference-in-Differences (DID) is applied to the annual panel data of the Chinese listed firms from 2003 to 2020 to study the effect of the undertaking industrial transfer demonstration zone on firm-level Total Factor Productivity (TFP). It is founded that firm-level TFP increases for the treated firms during policy intervention years in comparison to firms in the control group. Before proceeding to estimating the result, a parallel trends test is conducted and it is passed. The dynamic effect test show that the treatment effect becomes significant and shows a trend of strengthening over time after the policy intervention. The placebo test suggests that the estimated results are robust and it is almost impossible for the non-observed area characteristics to affect the estimated results. Four conducted robustness tests, including changing dependent variable, elimination of outliers’ effects, changing level of clustering in standard errors and changing policy intervention year, has proved the robustness of the result.

Keywords—industrial transfer demonstration zonefirst term, total factor productivity, robustness tests, two-way fixed effects model, difference-in-differences

Cite: Zixuan Liu and Che Su, "How Does Undertaking Industrial Transfer Demonstration Zone Affect Firm-Level Total Factor Productivity? Evidence from China," Journal of Economics, Business and Management, vol. 13, no. 3, pp. 320-324, 2025.

Copyright © 2025 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

 

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