What are the key location factors for firms in special economic zones? Evidence from Poland

Abstract

Purpose: Since the Polish special economic zone programme (SEZ) serves as a good ground for running location-based studies, due to its footloose approach towards the location of SEZs subzones, the paper aims at depicting the hierarchy of location factors investors in SEZs have, compared to non-SEZs entities. Approach/Methodology/Design: Basing on the data obtained from a survey on equally-sized and comparable two groups of firms: (i) in SEZs, and (ii) operating outside SEZs, the paper verifies the magnitude of influence of particular location factors on firms’ decisions where to locate their establishments. Differences in the perception of factors are further tested with parametric and nonparametric statistical tests to reveal significant differences among them. Findings: Firms in SEZs put the availability of tax exemptions in SEZs as an essential location factor. Statistical tests have proved significant heterogeneity among SEZ and non-SEZ entities, generally signalling higher attention (in case of the former) put to the closeness to outlet markets, research centres, FDIs, leaders in the industry and availability of low-skilled workers. Practical Implications: The knowledge of the hierarchy of location factors in SEZs may enhance the quality of management in SEZs, reveal areas supervising agencies should take care in the expansion of SEZs, and finally increase the effectiveness of SEZs programmes. Originality/Value: The paper advances by indicating a series of success factors in the operation of special economic zones, the managing agencies should bear in mind when undertaking decisions on the location of particular zones.