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Special economic zones in the Dominican Republic : policy considerations for a more competitive and inclusive sector. : Special economic zones, global value chains, and the degree of domestic linkages in the Dominican Republic (Spanish)

The Dominican Republic is often considered an example of the successful implementation of Special Economic Zones (henceforth SEZs) in the Western hemisphere. The zones fueled economic growth during the 1980s and 1990s and, while they experienced a sharp decline in employment due in part to the expiry of the end of the Multi-Fiber Agreement and stronger international competition in the textile and apparel industry in 2005, signs of recovery have been observed since 2009. Surgical equipment, chemicals and plastics, and footwear have recently emerged as the new drivers of export dynamism in the zones (World Bank, 2015). The objective of this report is to inform the policy discussion around the developmental impact of SEZs in the Dominican Republic by empirically assessing i) the implications of regulatory reforms aimed at complying with WTO disciplines regarding the elimination of incentives conditioned on export performance for SEZs firms, ii) the extent to which SEZs participate in Global Value Chains, and iii) their linkages with domestic suppliers. The report is organized as follows: The second section presents the historical importance of SEZ as an engine of economic growth in the country. The third section depicts the structural shift in terms of production in SEZs and evaluates the degree of value addition taking place in the Dominican Republic. The fourth section evaluates the degree and evolution of linkages between SEZs and local firms. The fifth section shows the impact of the regulatory changes in the SEZ regimen undertaken to comply with WTO disciplines. Finally, some conclusions and policy recommendations are presented in section six.


  • Author

    Reyes,Jose Daniel, Eduardo Sanchez,Miguel, Ferrantino,Michael Joseph, Riaño,Alejandro, Defever,Fabrice Fernand, Engel,Jakob, Arenas,Guillermo Carlos, Ahdiyyih,Semira Sahar

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    Working Paper

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    Dominican Republic,

  • Region

    Latin America & Caribbean,

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  • Doc Name

    Special economic zones, global value chains, and the degree of domestic linkages in the Dominican Republic

  • Keywords

    private sector development specialist;female labor force participation;domestic value added;global value chain;preferential market access;special economic zone;free trade agreement;foreign direct investment;signs of recovery;share of import;transfer of technology;tariff rate quota;trade and competitiveness;preferential trade agreement;share of wage;global financial crisis;foreign value added;transfer of good;exemption of tax;export processing zone;global production network;dependence on agriculture;country development strategy;job search assistance;domestic financial market;dispute settlement mechanism;elimination of trade;fragmentation of production;inclusive economic growth;business to business;chamber of commerce;lack of linkage;medical equipment;duty-free access;exporting firms;domestic input;fiscal incentive;export performance;clothing sector;customs datum;electrical product;national customs;imported inputs;sectoral composition;real wage;duty-free treatment;domestic sale;export product;intermediate input;surgical equipment;import quota;special tax;export basket;domestic supplier;Job Creation;tax concession;national account;export share;production process;gross sale;food processing;trade preference;regulatory change;footwear industry;export dynamism;industrial good;import duty;electrical appliance;business environment;Labor Market;industrial park;manufacturing sector;high wage;apparel sector;domestic exporters;export value;comparative advantage;local input;firm level;production structure;export promotion;import transaction;apparel product;export competitiveness;low-skilled worker;Industrial Goods;export volume;working capital;private actor;capital good;export subsidy;export subsidies;worker increase;broad agreement;regulatory environment;fiscal revenue;economic reform;regulatory distortion;quality certification;beverage industry;product level;new industry;import product;public park;vertical specialization;policy perspective;foreign input;import tariff;raw material;pressure valve;affiliate company;Product Diversification;company operating;manufacturing industry;domestic producer;international competition;export behavior;leather industry;textile product;product sector;manufactured export;package service;customs territory;industry representatives;national association;domestic economy;aggregate exports;intense competition;garment production;electrical equipment;symmetric matrix;Trade Impact;service company;export flow;subsidized import;civil engineering;countervailing measure;multilateral disciplines;job opportunity;investment incentive;garment manufacturer;economic diversification;private investor;promotion agency;tariff exemption;foreign company;extensive use;policy tool;job opportunities;multinational companies;multinational company;significant factor;short series;long-term contract;clothing exports;positive externality;national tax;export market;investment fund;agglomeration economy;efficient investment;free zone;emerging industries;external competitiveness;transportation cost;medical instrument;textile industry;low-skill worker;low skill worker;international investor;national investment;economic sector;program leader;local industry;import value;tax incentive;labor-intensive product;geographic proximity;adjustment assistance;foreign investor;Natural Resources;managerial practice;intermediate imports;industry characteristic;institutional framework;domestic sourcing;regulatory barrier;Vocational Training;income support;fiscal resource;cost-benefit analysis;tax revenue;section show;sugar production;trade product;source country;national industry;economic crisis;total output;primary goods;sectoral employment;basic metal;optical equipment;production base;investment regulation;empirical evidence;developmental impact;empirical work;employment intensity;manufacturing process;job generation;Electrical Sector;manufacturing production;national product;fiscal cost;apparel article;cotton fabric;import structure;apparel good



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Reyes,Jose Daniel Eduardo Sanchez,Miguel Ferrantino,Michael Joseph Riaño,Alejandro Defever,Fabrice Fernand Engel,Jakob Arenas,Guillermo Carlos Ahdiyyih,Semira Sahar

Special economic zones in the Dominican Republic : policy considerations for a more competitive and inclusive sector. : Special economic zones, global value chains, and the degree of domestic linkages in the Dominican Republic (Spanish). Washington, D.C. : World Bank Group.