Dear Members of the World Investment Network,

It is our pleasure to share with you the newly published Volume 26#2 of our Transnational Corporations academic journal, which is dedicated to special economic zones and their potential as vehicles for development.

The issue, guest edited by Rajneesh Narula, grew from research and background papers that fed into the 2019 World Investment Report, the thematic focus of which was SEZs. In compiling this issue, we sought to contextualize the emergence of SEZs, their evolution, and the associated policy trajectories that underpin them, drawing extensively on the experience of several countries.

• Rajneesh Narula and James Zhan’s introductory paper on the policy implications of leveraging SEZs for development amalgamates observations from the broader academic literature and the findings of the WIR 2019. The authors consider how well-designed zones adjust their purpose according to changing comparative advantage and countries’ underlying development level, to optimize their role as development enablers.

• Aradhna Aggarwal provides perspective on SEZs and economic transformation by presenting a three-pillar analytical framework to establish the success factors and development outcomes of SEZs. She argues that a well-structured approach will align SEZs with broader development strategy, and that effective execution and continuous evaluation are key underpinnings for unlocking SEZ-led economic growth.

• In an assessment of China’s experience with developing and adapting SEZs at home and abroad, Xiangming Chen explores the different types of SEZs built by China, as well as their evolution. The author teases out policy lessons for other countries seeking to tap zone-linked industrial development for developmental gains.

• The extent to which SEZs act as catalyst for the growth of surrounding areas is a key consideration for using these policy tools to prop up underdeveloped regions. Susanne Frick and Andrés Rodríguez-Pose use night light data as proxy for the performance of SEZs and surrounding areas to examining the economic growth spillovers generated by 346 SEZs in 22 emerging countries.

• The Shanghai Pilot Free Trade Zone served as springboard to test China’s new policy to further open trade and liberalize the services sector. Guangwen Meng and Douglas Zhihua Zeng provides a detailed study of the Shanghai Pilot FTZ, its success factors and challenges, and draws out lessons.

• Alexey Kuznetsov and Olga Kuznetsova trace the policies and experience in different regions in Russia with SEZs since their advent in 2005. The authors find the results to be mixed and map out policy lessons relevant for developing countries.

• The SEZ universe has become complex as zone types multiplied to accommodate new and modified objectives. In a research note, François Bost provides a taxonomy of the different terminologies in use and describes the key differences between SEZs and free zones by major geographical regions and countries.