In the Right Zone? Firm-Level Evidence from Italy’s Special Economic Zones

This study evaluates the impact of Special Economic Zones (SEZs) in Southern Italy using a panel of firm-level data (2014–2023) and policy evaluation methods, including heterogeneous and synthetic Difference-in-Differences. SEZs, introduced in 2017 to re- duce regional disparities via tax incentives and administrative simplifications, are found from the outset to additionally increase tangible capital assets by 19%, while their effects on employment remain limited. Notably, the policy is more effective in areas with lower institutional quality, highlighting the importance of administrative efficiency in disad- vantaged contexts. Moreover, firm-specific characteristics contribute to explain observed heterogeneity of the impact, suggesting that tailored implementation strategies could en- hance SEZ performance.