REVIEW OF THE LITERATURE Various articles on different facets of Special Economic Zone such as Performance appraisal of Special economic

zones in India, Growth of Special Economic Zones, Balanced or Unbalanced Development of SEZs, Framework within which SEZs operate, Role of SEZs and Export Processing Zones in the development of a country, Impact of SEZs on regional development in Ukraine, Cost-Benefit analysis of EPZs, SEZ a global experience and best practices, Foreign Direct Investment and the development of SEZs in China, the dynamics of EPZs etc., which are restrictive in nature and do not give a comprehensive picture. A brief review of some of the relevant literature is as under:

Kaul Committee (1978) reviewed Kandla Special economic zone and pointed out that the growth of EPZs in this phase was hampered by several handicaps like the absence of a policy, absence of implementation authority to centrally coordinate and control, etc. The committees made several concrete recommendations to improve the performance of this zone. Tondon Committee (1981) reviewed both Kandla and Santa Cruz Special economic zone and pointed out that the growth of EPZs in this phase was hampered by several handicaps including procedural constraints, infrastructural deficiencies, limited concessions and limited powers of the zone authorities to take actions on the spot resulting in inordinate delays. D R Phillips & A G O Yeh (1987) explained the development since the late 1970s of four Special Economic Zones in South China, in which a variety of economic change is being piloted, has now been widely documented. These zones have certain similarities with Export Processing Zones in some other countries within Southeast Asia, although they are more comprehensive in development and include the provision of housing for foreigners and local Chinese, as well as social services and many other facilities. Housing and service provision has, to an extent, however, lagged behind the economic and physical development of the Chinese zones. The authorities in the zones have begun to view housing as an item worthy of investment, and the coexistence of foreign firms and joint ventures with Chinese-owned undertakings within the zones has meant that incomes and aspirations, and hence demands for facilities, are often higher than elsewhere in the country. This has meant an important re-examination of socialist principles in the zones. Housing in particular is becoming a commodity which is of higher quality than elsewhere in China and can be bought and sold, and many types of social and retail

services are also being provided by individuals and firms rather than by the state or larger production units. In this paper the authors examine some of the changes currently being witnessed in these zones and the dilemmas which they pose for a government still attempting to maintain an avowed socialist orientation in its policy. In particular, they discuss the emergence of competition for housing and resources, and consider the extent to which the commodification of social facilities is compatible with the continuation of socialist state policy. Chan, J. C. M. & Sculli, D. & Wong, S. K. (1988) analyzed the costs of production in and around the Shenzhen special economic zone and compares them to those of producing the same products in Hong Kong. This is done through two case studies involving the production of a doll and a digital watch. Results indicate that while production costs are much lower in Shenzhen, problems can arise in dealing with the local Chinese authorities. The general work attitudes in socialist China often make it difficult to select and retain workers. Chan, J.C.M. & Sculli, D. & Si, K. (1991) examined the problems and costs involved in the transfer of production facilities from Hong Kong to the Shenzhen special economic zone of China. This is done via a case study in the production of toys. The payback period needed to recover the costs incurred in the transfer of different types of plant are calculated. The production unit cost for a toy is also examined and compared to that of producing the same product in Hong Kong. Costs appear to favour Shenzhen, but there are many nuisance probleme of a general management nature that come up when trying to operate in a socialist country such as China. Some of these problems are also discussed. Jean Jinghan Chen (1996) visualized that since embarking on economic reforms and the open door policy in 1979, China has been achieving rapid economic growth and development. The Chinese government has made substantial construction investment, especially in establishing the Special Economic Zones (SEZs) as test beds for development policies and homes for foreign investors. From the viewpoint of China, most of these investments are regarded as public investment. It is, therefore, of interest to examine the extent to which the investment benefits society. This paper analyses this type of investment by using a cost-benefit technique to build up a social cost-benefit model. The results indicate that the Chinese public construction investment, particularly in the case of the SEZs, is a beneficial investment from the standpoint of China's economic welfare. Although considerable public expenditure has been incurred in establishing the areas, the benefits, such as employment, foreign-exchange earnings and technical training,

which the development has brought to China, have exceeded the costs. The infrastructure will remain and will benefit China in the long term. This is the main reason for the government to extend this type of development to the whole country. Sugata Marjit & Hamid Beladi (1997) used a general equilibrium framework with training costs to characterize a special economic zone which uses foreign capital and local labor. Competitive equilibrium without government intervention leads to "overflow" of local labor in the foreign enclave. A sector-specific wage tax implements the "first-best" level of employment in the special economic zone, justifying active government intervention. Our result holds in the extended version of the basic model. Litwack and Qian (1998) in their report "Balanced or Unbalanced Development: Special Economic Zones as Catalysts for Transition" developed a theory for a transition economy under which an unbalanced development strategy that favours special economic zones emerges as a response to two critical problems: (i) political pressure to satisfy certain social expenditure requirements, and (ii) the lack of institutions to constrain the state from expropriation. By promoting the concentration of resources in some areas, a low equilibrium trap can be avoided, while important spillover effects may be generated elsewhere. The experience of China with special economic zones and coastal open areas is interpreted in this light. Some problems in the Russian economy are also discussed in the context of this theory. Austria, Myrna S. (1998) explored that the change in the countrys investment policies has been a crucial factor in building up confidence in the countrys economic prospects. Despite the reforms undertaken, the countrys performance in attracting foreign direct investment is still lower than its neighboring countries. This paper examines the factors that determine the foreign direct investment (FDI) and its behavior over time. It also analyzes the effectiveness of the Philippine incentive system particularly in the firms from the export processing and special economic zones. Wei (1999) developed a dynamic framework within which issues concerning the role of export-processing zones in promoting economic openness and transition is assessed. Technological learning and adaptation contribute profoundly to economic development in LDCs; multinational activities tend to generate an externality that facilitates the process of technology transfer and learning. The model signifies these critical factors. The study suggests, among other things, that the concept of export-processing zones may serve as an effective policy means, when

implemented properly, in achieving greater economic openness and growth. In this gradual evolving development process, countries that operate export-processing zones may follow a different transitional path and sequence from the one that is often cited in literature. Madani (1999) stated that as an instrument for encouraging economic development, export-processing zones have only limited usefulness. A better policy choice is general liberalization of a country's economy. This study analyzed the impact of trade policy and its tools on development. Chan and Sculli (1999) examined the problems and costs involved in the transfer of production facilities from Hong Kong to the Shenzhen special economic zone of China. The payback period needed to recover the costs incurred in the transfer of different types of plant are calculated. The production unit cost is also examined and compared to that of producing the same product in Hong Kong. Costs appear to favour Shenzhen, but there are many nuisance problems of a general management nature that come up when trying to operate in a socialist country such as China. Kuotsai Tom Liou (1999) examined major strategies and lessons of China's post-Mao economic development. The article first reviews the process and achievement of China's economic development. It then analyzes major strategies emphasized in the development years, including: the contract responsibility system, the dual price system, the special economic zones, and administrative reform. The article further discusses important lessons that are associated with the Chinese development experience, which consist of a reform-oriented development; an incremental and practical approach; a two-way development; a government-guided development; an uneven development strategy; a kindred development model; and a peace and stable environment. The implications of the Chinese development experience are also discussed. Copyright 1999 by The Policy Studies Organization. OHara (2000) stated that it is a simple model with 'export-processing zone' that exogenous inflow of foreign capital must increase welfare of an economy importing capitalintensive goods and following protectionary policy. It should also be added that this welfare effect depends on reasonable capital-labour ratio of the export-competing sectors in the country concerned. Wilmore (2000) analyzed that export processing zone in the Dominican Republic are immiserizing and fail to transfer technology. This study contradicts this claim and recommended

that incentives now limited to production in the zone be extended to all nontraditional export in order to induce backward linkages and increase domestic value added. Gustav Kristensen & Jie Zhang (2001) stated that China's policy on Special Economic Zones has attracted increasing flows of direct foreign investment to China. The investment has been very unequally distributed among China's 30 regions. The article focuses on the regional economic growth as a result of the direct foreign investment in the region and its spillover effects on neighboring regions. The unequal distribution of direct foreign investment should in principle tend to enlarge the regional economic differences. The article, however, shows that this is not the result of the investment. The empirical findings highlight the impact of direct foreign investment on the Chinese regional economies in transition. Andrzej Ciesilik (2001) investigated the role of direct foreign investments in the regional diffusion of intellectual capital in Poland. The empirical results obtained on the basis of the labour market analysis suggest that wages are higher in those regions of Poland which are characterized by greater activity of foreign investors measured by their share in regional employment. This result confirms the view that apart from capital foreign firms supply also indirect production factors which lead to raise the productivity of the employees which in turn is reflected in higher levels of remunerations in relation to regions with smaller commitment of foreign investors. Direct foreign investments can be seen as one of the instruments of regional policy, however the distribution of special economic zones whose purpose is to attract investors does not seem to favour the decrease of the differences in development between the regions. Zhiqiang (2002) investigated empirically whether foreign direct investment generates externalities in the form of technology transfer. Using data on 29 manufacturing industries over the period from 1993 to 1998 in the Shenzhen Special Economic Zone of China, he found that foreign direct investment has large and significant spillover effects and it raised both the level and growth rate of productivity of manufacturing industries and domestic sectors are the main beneficiaries. He also found that some domestic sectors got benefit more than others from the external effects of foreign direct investment. The results are robust to a number of alternative model specifications. Kachur (2002) examined the impact of certain incentive schemes called special economic zones (SEZs) and territories of preferential treatment (TPDs) on investment

distribution across Ukrainian regions. Theoretically, due to lower taxes, administrative units (oblasts) with SEZs and TPDs should receive increased flow of investment, everything else held constant. Empirical evidence shows that SEZs and TPDs result in significant crowding in effect on investment at the oblast level. Yet, the analysis shows that privileged territories affect investment distribution and induce a relocation of investment to privileged areas. However, estimations do not show a significant impact of SEZs and TPDs on the inter-regional distributions of investment across Ukraine. Based on the analysis, it was recommended that SEZs and TPDs should not be extended to the developed regions if the goal is to reduce regional disparity across different regions of Ukraine. Makabenta (2002) analyzed the location behaviour of foreign direct investments (FDIs) in the Philippines from 19871998 and pointed out the role special economic zones (SEZs) and infrastructure play in this location decision. The effects of real income, wages, skills, SEZs, highways and ports on the probability that a manufacturing FDI firm chooses a region are estimated using a negative binomial count model. Results yield expected signs and significant coefficients for all variables except for skills. Regressions were also run for 19871992 and 19931998 sub-periods to examine structural changes. The stark shift of investments from Metro Manila into other regions during the latter period shows some possible spillover effects of the SEZs as well as infrastructure development carried out in the previous transitional sub-period. Significant marginal effects are highest for paved highways and ports, which strongly indicate that improvement of these two regional factors, increase the probability of FDI location. Schweinberger (2003) analyzed that making use of a global partitioning (disintegration) approach, a novel necessary and sufficient condition for the creation of Pareto-improving special economic zones is derived. It is shown that the establishment of a special economic zone may be desirable even if foreign investment has an immiserization effect. The present approach allows not only for the use of mobile but also immobile domestically owned factors in the special economic zone. Adopting a political economy perspective, multi household economies with and without the feasibility of lump-sum compensation is modeled. It is shown that, subject to certain conditions, the setting up of special economic zones accompanied by appropriate tax policies results in an increase in government revenue. The latter may be used to finance much-needed investment in infrastructure or the production of public goods.

Schweinberger (2003) analyzed the welfare effects of the establishment of special economic zones in a small open economy with tariffs on trade in final goods and binding quotas on the imports of intermediate goods is developed. It is proven that there generally exist allocations of binding quotas to the domestic and special economic zones, which improve welfare. Then it is shown that the abolition of the quotas on imports into the special economic zone may reduce welfare. Finally, the welfare effects of abolishing the quotas also in the domestic zone are analyzed. Jones and Cheng and Owen (2003) examined that Chinese city-level data and indicated that differences in growth rates are far more severe than indicated in previous studies, which typically use data at higher levels of aggregation. They estimate growth equations using citylevel data and found that the policy of awarding a special economic zone status enhances growth substantially, increasing annual growth rates by 5.5 percentage points. Annual growth rates of open coastal cities are, on an average, 3 percentage points higher. The qualitative results on the role of policy and the effects of FDI are similar to those of earlier studies that have employed provincial-level data; but, quantitatively, the results are substantially different. They also provide evidence of an indirect role of policy in the growth process through its ability to attract growthenhancing foreign direct investment. Kankesu (2003) surveyed research on the performance of Export Processing Zones (EPZs) using a benefit-cost analytical framework. The results suggest that zones in South Korea, Malaysia, Sri Lanka, China and Indonesia are economically efficient and generate returns well above estimated opportunity costs. On the other hand, the heavy infrastructure costs involved in setting up the zone in the Philippines resulted in a negative net present value. The zones have been an important source of employment in all cases and have promoted local entrepreneurs. However, as industrial development proceeds, the gap between the market and opportunity costs of labour narrows and the interest in EPZs tends to disappear. It may hold only if the zones generate private profit to domestic shareholders. Kung and Lam (2004) highlighted that since the implementation of the open door policy in 1979, China has moved out of its economic isolation from the world and interacted actively with globalization. The open door policy was initiated by the establishment of Special Economic Zones. The basic purpose of the SEZs is to absorb foreign capital. For more than 20 years, the world has witnessed the remarkable growth of Chinas economy. The role of foreign direct

investment (FDI) in economic development has become a topic of great scholarly interests. The first two SEZs, Shenzhen and Zhuhai presented two different scenarios for economic development in southern China. They are similar in historical background and geographical location but different in economic and regional development. FDI has become the key for understanding the difference. This study revealed that FDI was not the main determinant of economic performance in the two SEZs. FDI has greater influence on the growth of the output value of industry and export. However, it has been less influential in the growth of employment and capital construction investment. The study suggested that government support and domestic investment are important in affecting the economic development of the SEZs. FDI has contributed to a certain extent, but it is not the only factor in bringing economic prosperity to Chinese cities in the post-reform era. Xie (2004) explained that SEZs have been adopted by many countries, particularly in the Asia region, as a popular means by which to foster and stimulate economic development (Wong and Chu 1985; Oborne 1986). Encouraged by the success of SEZs in other Asian regions and countries in the 1960s and 1970s, China set up four SEZs in 1979 including one in Shenzhen. As a result of its extraordinary growth and success, Shenzhen SEZ has itself become a positive example and impetus for the rest of the world. Although a large number of SEZs are already in operation around the globe (approximately 400), it is likely that a growing number of SEZs will continue to appear, both in Asia and worldwide. This is because SEZs have generally proved to be a successful means of fostering economic growth and prosperity. However, despite their general effectiveness, there exist variations in the relative success of SEZs both within China, and between China and other countries. For example, within China, Guangdong's other two SEZs lag far behind Shenzhen SEZ (Liao 1999). Indeed, Shenzhen SEZ is perhaps the most successful example of a SEZ in the world, having enjoyed explosive growth (Kasliwal 1998). Shenzhen also stands in stark contrast with some rather unsuccessful SEZs in other countries, including those near Bombay and the Kandla SEZ in India. Mauricio (2004) analyzed the firm-level data from enterprises in Export processing zone in Coasta Rice. They performed an econometric analysis of firm- and industry-specific characteristics thought to affect the propensity of those enterprises to source intermediate inputs in the local economy. The results suggest that the industry of the firm, the firm's capital intensity,

the firm's age and size, whether the firm is majority-owned by locals and the proportion of the output sold in the local market are all correlated with that propensity. Aggarwal (2004) focused on the interplay of exports, employment, imports and value addition and examined the data for the period between 1966, when the first EPZ was set up, and 2003, a year after the Exim Policy introduced the notion of SEZ and a year before the draft SEZ Bill was written. Analysis of the EPZ/SEZ performance revealed that growth rates of aggregate exports, foreign exchange earnings and employment have been falling over the years since the late 1980s. Furthermore, it is also found that the share of EPZ/SEZ exports in total exports has been almost stagnant since 1990. The study also examined some of the factors responsible for the unimpressive performance of the zones in India. Kaushik (2004) analyzed a central proposition on which much of normative economics is founded and asserted that if two or more adults voluntarily agree to an exchange or trade and this does not have a negative fall-out on others, then government should not stop this exchange. Yet, on a variety of matters (hazardous work, the right to give up trade union rights in order to work in an export-processing zone), it tends to justify government or international interventions banning seemingly voluntary exchanges. This will explore the meaning of coercion and voluntariness and try to articulate general principles for describing certain markets as 'obnoxious'. The principles will be applied to different labour market problems, ranging from sexual harassment to hazardous work. Cling and Razafindrakoto and Roubaud (2004) explained that Zone French has had a very significant macro-economic impact in terms of exports and jobs. Thanks to Zone Franche, before the 2002 crisis, Madagascar had become the second largest African exporter of clothing, after Mauritius. The average wages paid in Zone Franche are lower than in the other formal sectors of activity, which is due to the characteristics of the labour employed. On the contrary, social conditions are better. Glick and Roubaud (2004) examined whether EPZs are beneficial for development remains a subject to controversy. This study analyzed the labour market impacts, using unique time-series labour force survey data from a unique (for Africa) environment: urban Madagascar, in which EPZs grew very rapidly during the 1990s. Employment in the EPZs exhibits some basic patterns seen elsewhere in export processing industries of the developing world (predominance of young, semi-skilled female workforce). Taking advantage of micro data availability, they

estimated the earnings regressions to establish the sector wage premia. According to the estimates (which confirm results of other studies based on aggregate data), employment in EPZs represents a significant step up in pay for women who would otherwise be found in very poorly remunerated informal sector work. EPZs may have significant impacts on poverty because they provide relatively high wage opportunities for those with relatively low levels of schooling. Further, by disproportionately drawing women from the low wage sector, informal sector, (where the gender pay gap is very large) to the relatively well paid export processing jobs (where pay is not only higher but also similar for men and women with similar qualifications), EPZs have the potential to contribute substantially to improved overall gender equity in earnings in the urban economy. Chi-Yung and Whalley (2004) considered the progressive geographical expansion of free trade zones within countries as a form of trade liberalization and compare observationally equivalent liberalization involving changes in the coverage of a free trade zone for a fixed tariff rate and tariff reductions applying to all trade if there are no free trade zones in the country (in the sense of generating similar changes in trade volumes). Their work is motivated by China's approach to service trade liberalization in banking and other areas of progressive additions of cities to automatic license treatment for foreign entities. They used numerical simulation methods to compare conventional national tariff reductions to trade liberalization achieved through the geographical expansion of free trade zones in terms of welfare impacts. Either the size of the free trade zone with a fixed tariff, or the tariff rate given the size of the free trade zone can be endogenously determined so as to yield observational equivalence in the sense of trade volume impacts across trade policy changes. Numerical results overwhelmingly indicate larger welfare costs from imposing geographically restrictive schemes since a higher tariff applies to a smaller fraction of trade and distortions within country trade also apply. Numerical policy analysis used a conventional tariff-equivalent ad valorem modeling approach to evaluate the impacts of liberalizing geographical barriers can thus be highly misleading. Samuel Wolfe Calhoun (2004)The late Professor Arthur Leff believed that standard methods for grounding normative assertions fail to provide a solid foundation for moral judgment because none provides a satisfactory answer to what Leff called the grand 'sez who?' a universal taunt by which a skeptic may challenge the standing/competency of the speaker to make authoritative moral assessments. Leff argued that as a matter of logic no system of morals

premised in mankind alone ever could withstand the taunt. His provocative conclusion was that the only unchallengeable response to the grand 'sez who?' is God sez.

This Article demonstrates the continued relevance and validity of Leff's critique by evaluating three contemporary discussions of morality: (1) Judge Richard Posner's attack on academic moralism; (2) Professor Edward Wilson's assertion that morality has a biological basis; and (3) Professor Steven Pinker's attempt to distinguish between morality and our innate human nature. Although Leff did not discuss the practical possibility of a God-based moral system, this Article examines the practical question, focusing on three critical presuppositions implicit in seeking God's help to discern the right: (1) God actually exists; (2) one looks to the God who actually exists; and (3) this true God communicates what is "right" in understandable ways. While not providing any final answers, this Article honestly grapples with the three key issues, refuting some common objections to a God-premised morality, while acknowledging the existence of some genuine difficulties Sivaraman, Vasant, J., Charulatha and Pillai, Vishnu (2004) The SEEZEE Ceramics Ltd (SEZ) case, set in India, provides a framework for financial analysis and for exploring a link between economic profits and shareholder value. The student is required to consider a critical decision for SEZ; the decision to invest and grow as opposed to focusing on consolidation of the existing business operations. Associated with this key decision are related issues pertaining to the financial position of SEZ. The accounting statements point to growing earnings for the company; however when seen in the perspective of returns expected by the market, the picture is not bright for SEZ - this is brought out by looking at the economic profits of SEZ. From being a preferred stock of analysts, SEZ moved quite quickly to large drops in market value. The case offers students an opportunity to undertake an analysis of SEZ's capital structure and the company's cash flow statements in order to address the principal decision, which has a direct bearing on shareholder value. In addition, views from the equity capital market also enter the frame of understanding in the course of discussion related to the company's financing mix. Maquito, Ferdinand & U, Peter Lee (2004) The Philippines has become an exportoriented economy, with exports increasing in significance. The electronics industry, in particular, is a showcase of this newfound export prowess. Traditionally, comparative advantage is the takeoff point for understanding trade patterns in economic theory. This paper tries to augment the static nature of the theory of comparative advantage with the dynamics of the flying geese

model of economic growth. Applied to the context of Japanese manufacturing networks in recent years, it provides an understanding of the flow of Japanese investments overseas. Export processing zones or special economic zones seem to have played an important role in the electronic industry's export success by attracting sizable investments. This paper estimates an export output production function for special economic zones in the Philippines and finds that most exhibit constant if not increasing returns to scale. It also finds that export output tends to be elastic with respect to labor input in most cases. This lends support to interview findings that cite the quality of labor as an attraction of the Philippines. The paper also points out that rates of domestic procurement by Japanese manufacturing firms remain low, suggesting poor backward integration with the rest of the economy. Lastly, the paper ends with some comments and suggestions on the existing draft of the Japanese Philippine Economic Partnership Agreement available at the time of writing. Ke and Whitwell and Yao (2005) employed a general macroeconomic analysis to describe the economic growth and performance of the Special Economic Zone (SEZ). It is shown that not only the foreign investment make a significant contribution to the economic growth of the Zone, but the rapid response of foreign investment to the output level is also important for maintaining steady-state growth. The open door policy and the policy of encouraging foreign investment have thereby played an important role in the recent development of the Chinese economy. Sharma (2005) visualized a SEZ as a revolutionary global development for everyone the developer, unit-holders, the country concerned and other countries and to mankind as a whole. The most glaring example is China. The SEZs there have taken the country up to unimaginably high economic levels. They have also changed the global happening of price-rise of the commodities every year by supplying materials and commodities at as low as 30-40 per cent of the then prevailing prices. A SEZ is a center for achievement for best performance with respect to productivity, quality, delivery and cost control. Seth (2005) explored that Government of India is seriously pondering over the concept of Investment Regions modeled on Pudong, Rotterdam and other successful ventures across the world to dot the map of India. To get the maximum possible leverage from the proposed investment in infrastructure, the Government of India has proposed to come up with a plan for setting up 5 or 6 such regions in India. The proposal being debated envisages a single mega

industry led cluster that will have a planned network of high quality roads, air and sea ports and power plants connecting every industry and development area in a geographical area of 250-300 kilometers. It is also proposed to subsume the existing SEZs in such Investment Regions. The establishment of the SEZs has undoubtedly helped to increase the volume of international trade. Further, a large amount of foreign investment has found its way not only into the export trade, but also into infrastructure construction and commerce. Foreign companies have been encouraged to establish their presence in the territories and the export industry has grown. Advanced foreign technology has been brought in with the inflow of foreign investment. All these factors have contributed to the growth of the Indian economy. The enactment of the SEZ Act and its implementation should enable the Government of India to fulfill its agenda of economic reforms as the multiplier effects on the economic activities triggered by SEZ materialize. The Parliamentary Standing Committee on Finance, (2006) in its 33rd report presented to Parliament on 17.2.2006 examined that duty foregone under these export promotion schemes for the year 2004-2005 is Rs 41,032.56 crores as against Rs. 24,798 crores in 20012002. Out of that, the duty foregone for EOU/EPZ/SEZ during 2004-2005 was more than 10000 crores. If we add 181 SEZ projects formally approved till early October 2006, and the 128 SEZ projects approved in principle, the duty foregone on export-promotion would surpass much beyond 1,60,000 crores estimated by the Finance Ministry. This is only revenue loss to the central government. It does not take into account the tax exemption by State governments. No specific data on revenue implication has been worked out SEZ wise before approval. This is scandalous and we are witnessing a revenue scam in the name of export. Ranjan (2006) analyzed the SEZ policy in terms of export performance, FDI inflow, employment generation and overall physical and financial infrastructure building. This research paper tried to investigate whether these policies are good for the country or not. SEZs are a larger variant of Export Processing Zone (EPZ), thus performance of EPZ has also been analyzed. Lim and Lim (2006) focused on the challenge of developing North Korean SEZs successfully in terms of their ability to utilize and exploit both the competitive capabilities and the market forces of the adjacent South Korean economy. This paper concludes that the route to success for North Korean SEZs lies potentially is not only utilizing South Korea's market

competitiveness more effectively, but also in attracting greater levels of investment from South Korean private companies. Yasuyuki (2006) investigated the relation between an export processing zone and a pollution quota in a small country. The model supposes that the pollution target is implemented with a marketable permit system and the government sets the quota to maximize domestic welfare. If an increase in real income reduces marginal external damage, the pollution quota is relieved by the formation of an export-processing zone. However, if the marginal damage is augmented with an increase in the income, the optimal quota might be strengthened by the formation of the zone. Soni-Sinha (2006) explained that the EPZs are like islands of globalization. Much of the literature on EPZs and export-oriented industries (EOIs) notes a preponderance of women who are constructed as "cheap, and Close Curly Double Quote; "nimble fingered, and Close Curly Double Quote; and "docile and Close Curly Double Quote; labour. Socialist feminist thinkers dominate this literature and this paper argued that there is a need to incorporate the insights of postmodern feminist thinkers. The article focused on the role that language, discourse, and subjectivity play in the gendering process in handmade jewelry production in the Noida Export Processing Zone (NEPZ) and in the ranch production units related by common ownership in Delhi, India. It thus gives "voices and Close Curly Double Quote; to women and men, and brings out their agency in structuring the labour market. The study confirmed that gender division of labour is a product of discursive and material practices that are reproduced through discourses into which different actors invest and that feed into the gendered subjective identities of these actors. Feltenstein and Plassmann (2006) reviewed the trade reforms among the ASEAN countries, which recently began removing all mutual trade barriers. The standard method to avoid complete specialization in traded goods is to distinguish goods both by physical type and place of origin (the so called Armington assumption). This methodology is not suitable for the sort of intermediate goods produced by the ASEAN countries. They developed a computational approach in the context of a non-armington dynamic general equilibrium model. Analyzing the results of a calibrated version of the model, they found that trade liberalization is generally welfare improving for the ASEAN countries.

Anirudh Burman (2006) explained that a SEZ (SEZ) is a geographical region that has economic laws that are more liberal than a country's typical economic laws. In India, eight previously existing Export Processing Zones have been converted into SEZs. The policy provides for setting up of SEZ's in the public, private, joint sector or by State Governments. It was also envisaged that some of the existing Export Processing Zones would be converted into Special Economic Zones. Over the past few years, the policy of promoting zones has found favour with the government of India. In 2005, it enacted the SEZ Act and the SEZ Rules were notified in February 2006. The policy is expected to give a big push to exports, employment and investment in SEZs. The SEZ Act gives a wide area of discretion to the State and Central Governments to regulate an SEZ as they see fit. What is crucially different about other southAsian projects from the Indian model is that all these export promotion zones, special economic zones, free trade zones etc. were by and large state initiatives. The Indian SEZ program instead, shifts the burden of development and maintenance to the private investor. Again the legal regime inside a specific SEZ is the initiative of the concerned state government. In the context of a SEZ, the most pertinent facet of Corporate Social responsibility is the aspect of Corporate Social Rectitude, or corporate ethics. Writers have also tried to bring in a difference between social obligations and social responsibilities. They argue that social obligations imply corporate functioning within legal and social constraints, whereas social responsibility implies keeping in step with the prevailing social norms, values and expectations of performance. Concluding, a new initiative towards industrialization and manufacturing cannot violate basic fundamentals of corporate ethics and responsibility. Galina Golobokova (2006) stated that establishing of Special (Free) Economical Zone (SEZ) in Magadan region has become an actual task to support surviving of the territory in the condition of being remote from central regions of Russia and limited financial resources. This is determined by slow accumulation of local funds and constant sufficient flow of capital from Northern regions to the central parts of Russia. In 1999 on the territory of SEZ the preferential economical mechanism was applied. It allowed the companies registered within the SEZ not to pay federal taxes and customs fees in order to improve their financial status and also to create the Fund of SEZ which is used to new companies establishing and regional social problems solving. By 2004 the number of SEZ participants has reached 440 including 125 gold mining companies producing 63% of gold in region, and small entrepot companies covering 64 % of regional

production. Due to SEZ region managed to obtain stable dynamics of growth of gross regional product, installments to consolidated regional budget, and reduce the number of companies failing to pay wages in time. The Fund of SEZ financed construction of blasting material plant, silver processing line of Kolyma refinery plant; new mining complexes were set in operation. Due to foreign economical activity development new equipment and machinery for enlargement of output were delivered to Magadan region. Due SEZ the territorial so called points of growth were created. They had multiplicative direct and indirect effect on different sectors of economy. Magadan region, which is counted as a depressive region was able to reduce the decline of production, hold the inflation level, hold unemployment growth, improve social condition of population. The governmental restriction of period of SEZ existence and also problems resulting in SEZ operations are as follows: legislation instability, defective structure of management, unreadiness of some branches of economy for effective use of preferences, lack of innovative approach. This makes to review in prospects institutional and legislative basis of SEZ. Aggarwal (2006) described the economic rationale for SEZs; examines Indias experience with EPZs/SEZs; discussed the context in which SEZ policy is being promoted in the country; reviewed the arguments for and against SEZs; analyzed what went wrong, from the perspective of the promoters of the scheme. Aradhna Aggarwal (2007) aimed at examining the impact of Special Economic Zones (SEZs) on human development and poverty reduction in India. It identifies three channels through which SEZs address these issues: employment generation, skill formation (human capital development), and technology and knowledge upgradation. It examines how the impact of SEZs is passed through each of these channels. The study finds that the modality differs significantly according to the characteristics of the SEZs, in particular, the level of their development as reflected in the composition of economic activities. Within this framework, the study examines the sectoral and economic composition of SEZ activities in India. It finds that labour intensive, skill intensive and technology intensive firms co exist in India's zones and, therefore argues that all the three effects described above are likely to be important in the Indian context. Empirical findings reported in the study are based on the data collected from both secondary sources and primary surveys. The primary survey based data was generated through extensive interviews of entrepreneurs and workers across the three largest SEZs (in terms of their contribution to exports and employment) : SEEPZ, Madras and Noida. The analysis reveals that

`employment generation' has been the most important channel through which SEZs lend themselves to human development concerns, in India. Employment generated by zones is remunerative. Wage rates are not lower than those prevailing outside the zones. Besides, working conditions, non monetary benefits (such as transport, health and food facilities), incentive packages and social security systems are better than those prevailing outside the zones, in particular, in the small/informal sector. The role of SEZs in human capital formation and technology upgradation is found to be rather limited. The study argues that the zones' potential could not be exploited fully in India. This could primarily be attributed to the limited success of SEZs in attracting investment and promoting exports. The new SEZ policy gives a major thrust to SEZs. However the creation of SEZs alone does not ensure the realization of their potential. The government will need to play a more proactive role for effective realization of the full range of benefits from SEZs. Abraham, Filip & Konings, Jozef & Slootmaekers, Veerle (2007) used a new

longitudinal data set of more than 15,000 Chinese manufacturing plants to show that the direct and indirect effects of foreign direct investment on measured firm level productivity depend on a number of firm specific features and institutional factors. We find that domestic firms engaged in a joint-venture with a foreign partner are on average more productive, as well as exporting plants and plants located in special economic zones. In addition, domestic firms benefit from horizontal spillovers from foreign firms on average. However, these spillovers depend on the structure and origin of ownership as well as on specific characteristics of the special economic zones. First, spillovers are less likely to occur from fully foreign owned firms than from joint-ventures. Second, spillovers from foreign direct investment originating from oversees Chinese (Hong Kong, Macau and Taiwan) are stronger than from the rest of the world. Third, spillovers are higher in the special economic zone aimed at attracting foreign capital to fasten the development of Chinas own high tech industries. Liu, Xiaozi & Heilig, Gerhard K. & Chen, Junmiao & Heino, Mikko (2007) stated the relationship between economic development and environmental quality is a debated topic. Environmental Kuznets curve (EKC) is one prominent hypothesis, positing an inverted U-shaped developmentenvironment relationship. Here we test this hypothesis using data from Shenzhen, People's Republic of China. Established in 1980 as the first special economic zone in China, Shenzhen has developed from a small village into a large urban-industrial agglomeration with

the highest income level in the country. The enormous expansion of infrastructure, industrial sites and urban settlements has profoundly changed the local environment. We utilize environmental monitoring data from Shenzhen on concentration of pollutants in ambient air, main rivers, and near-shore waters from 1989 to 2003. The results show that production-induced pollutants support EKC while consumption-induced pollutants do not support it. Morris Sebastian (2007) visualized that Special economic zones following the enormous success of China have been widely imitated. But it is to be entirely anticipated that the results would vary greatly. Earlier avatars of SEZs in the form of Foreign Trade Zones (FTZs) and Export Promotion Zones (EPZs) were important in the export led growth of east Asia especially South Korea. But more than SEZs or EPZs per se it is the pursuit of export led growth policies which underlie the success of exporting and hence of SEZs. SEZz / EPZs can be seen as a (not necessary) microeconomic and spatial initiative in the pursuit of ELG under rather special circumstances by China, and South Korea and Taiwan to more limited extent in their early phases of transformation. In other countries not pursuing ELG the success of SEZs/EPZs has been rather modest. The roles played by the SEZs/ EPZs etc whatever their original purpose were constrained and determined by the macroeconomic policies, trade policies, and regional alignments. There is little meaning in studying SEZs beyond their layout and design without reference to these broader trade and macroeconomic policies. Thus early pioneers like India could make little out of their EPZs since the policies are severely biased against exports. We characterise export led growth (ELG) as the strategy that has allowed the late twentieth century industrialisations, which is far from both import substitution (as conventionally understood) and laissez faire, and to be the simultaneous pursuit of both IS and EP. With this framework we are able to understand the role and evolution of SEZs in a wide variety of countries. These help us to explain and anticipate that unless the policy turns sharply to favour exports (more correctly tradables over non tradables) the success of Indian SEZs would be modest and nowhere near that registered in China. Following from our characterisation of Import Substitution, Export Led Growth and Laissez Faire we also bring out the nature and performance of special zones when these are promoted under the very same regimes. Nallathiga (2007) analyzed that Special Economic Zones (SEZs) are insulated export areas that offer benefits such as duty concessions to manufacturing exports, and have several advantages, such as boost to industrial productivity, innovation, technology and management.

The economic benefits of SEZs are well documented across the world. Their success in China, however, drew much attention. India has also embarked on the creation of SEZs as the drivers of industrial production and export trade. This paper examined the concept and evolution of SEZs, overviewed international experiences with SEZ experiment, and critically evaluated the performance of the Chinese experiment of SEZs to provide insights into their potential for promoting industrial and regional economic development in India. Finally, it reviewed the evolution, features and recent performance of SEZs in India, and highlighted the critical factors for the successful development of SEZs in the Indian context. Mukund Mate (2007)explained many economies have used the concept of SEZ in one or the other form to promote exports and boost economic growth. The Indian experiment, started in 1965, did not yield the expected results till 2000. The reasons are many. However, it became imperative to remove the shortcomings and reframe the policy and rules in the post-liberalization era of Indian economy to achieve and maintain high growth rates and to uplift the living standards of Indian population. Inspired by the visible success of China, which started setting up SEZs in the 1980s, the Indian government ventured to revamp its policies regarding FDI, exports, etc. so as to create an atmosphere that is attractive for investors, introduce new technology and give a boost to exports. Due to lack of funds of the requisite order and need to move forward quickly, the government decided to involve private investors (domestic and foreign), unlike in the past. The policy was formulated in 2000 and given shape in the form of an act in June 2005. The rules and guidelines were formulated and made effective in February, 2006. Since the implementation of these rules began, there has been a spate of bitter criticism from different sections of the society, such as the intellectuals, sociologists, politicians from ruling and opposition parties, and environmentalists against the government's SEZ policy. The government has responded to this criticism, both in deeds (amendments) and words (arguments). This paper takes a look at the current SEZ policy and brings out the grave shortcomings, that are feared to have led to increased disparity in the country. It also suggests immediate action to prevent further damage. Siddhartha Mitra (2007) explored that on the basis of economic theory and history we can conclude that absorption of agricultural labour is necessary for sustained economic development of a developing country. Special Economic Zones (SEZs) constitute a medium for such sustenance. However, the SEZ policy in India has suffered from permission being granted

for far too many sub-optimally sized SEZs or for others serving as appendages to mega cities and therefore inheriting all the diseconomies associated with the large size of the latter. Mamta Baranwal (2007) visualized that the government is of the view that the development of Special Economic Zones (SEZs) will lead to the development of business and economy. In the process of establishing a SEZ, land acquisition plays an important role, which is also a sensitive issue among different players, such as NGOs, local people, politicians, developers, and the industrialists. Any delay in SEZ development leads to cost overrun of projects that is painful to the developers who have to pay a huge amount towards interest on their investment to banking institutions. This paper discusses how industries are 'migrating' from their existing sites to SEZs for getting tax exemptions. A good example is that of Videocon which has hired 50 farmers in 100-acre SEZ project at Aurangabad. However, Article 243G of the Constitution provides the necessary guidelines that the local government and the Planning Commission may examine each proposal and decide whether to continue or discontinue with the sharing of local resources. The paper also briefly discusses the salient features of Rehabilitation and Resettlement (R&R) Policy and concludes that India has to learn from the Chinese strategyto implement not more than 50 SEZs initially, learn fully and carefully from one's own experiment, and then move forward slowly to achieve a bigger target. Oskar Weggel (2007) took the Vietnamese reformers only five years to realize that quick development of their countrys economy could be pushed forward not only by work and capital, but also by utilizing the factor space. Capitalizing on the experiences of several maritime Southeast Asian countries with Growth Triangles as well as of Silicon Valley Industrial Park, of Taiwan and of China with their Special Economic Zones, Vietnam decided in 1991 to establish its first Special Economic Zone (SEZ) in Tan Thuan/Saigon. During the following fifteen years three so-called Key Economic Areas and 140 Industrial Zones, Export Processing Zones and other units with similar names have been created. The SEZ have proven to be cornucopias on the one hand, because they helped to accelerate the transfer of capital, technology and management to Vietnam and provided almost 1 million jobs. Furthermore they served as catalysts for the industrialization and urbanization of some areas and served, moreover, as models of dealing with the complexities of modernization. On the other side, the SEZ are extremely unequally distributed over the country, and therefore tend to reinforce the social and regional differences within Vietnam. Moreover, foreign companies to be invested in the SEZ

frequently have to lead a Robinson Crusoe existence and are therefore rather insulated from the domestic economy. Last but not least however, the Vietnamese legislation, facing the SEZ proves frequently to be a toothless tiger. Xiaozi Liu, Gerhard K. Heilig, Junmiao Chen, Mikko Heino(2007) analyzed the relationship between economic development and environmental quality is a debated topic.

Environmental Kuznets curve (EKC) is one prominent hypothesis, positing an inverted U-shaped developmentenvironment relationship. Here we test this hypothesis using data from Shenzhen, People's Republic of China. Established in 1980 as the first special economic zone in China, Shenzhen has developed from a small village into a large urban-industrial agglomeration with the highest income level in the country. The enormous expansion of infrastructure, industrial sites and urban settlements has profoundly changed the local environment. We utilize environmental monitoring data from Shenzhen on concentration of pollutants in ambient air, main rivers, and near-shore waters from 1989 to 2003. The results show that production-induced pollutants support EKC while consumption-induced pollutants do not support it. Philippine Institute for Development Studies (2008) showed that in the relatively new body of ideas dubbed new economic geography and spatial economics, we find insights on the potentials of industrial agglomeration for regional and national economic development. This paper looked into the evolution of industrial development in the country as a means of elucidating the centripetal and centrifugal forces leading to agglomeration of firms and investments. A micro perspective was provided with the case study extended into the prime region in the country, Greater Manila Area. It was found that industrial agglomeration in the country takes the form of special economic zones and industry clusters, indicating that the government is taking the route toward regional dispersal of industries and the clustering strategy to spur industrial dynamism and competitiveness and consequently, regional and national economic development. Menon, Sudha Venu (2008) examined growth experience in various sectors of the state and analyzes the medium and long term growth potential of the economy. Sector-wise performance of Gujarat economy is analyzed with a focus on key engines of growth and the effective role of these growth engines in macro economic acceleration of Gujarat Economy. During the nineties, Gujarat improved its economic performance remarkably in almost all secondary and tertiary sectors. While Gujarat has very strong performance in the manufacturing,

electricity, construction, transport & communication, and services sector, its major weaknesses is in the primary sector. The article attempts to identify principal drivers of the economy in the state and their contribution to economic growth. The sectors are- Energy, Oil & Gas, Agro &food processing, Textiles, Diamonds, Petrochemicals, SEZ etc. Concluding section highlights policy recommendations for sustained economic growth including land reform, investment in education and infrastructure, ports, more FDI, transparency and efficiency in administration, attaining social cohesion, macro economic management etc Mayumi & Nobuko, Yokota (2008) considered that the establishment of Export Processing Zones (EPZs) is a strategy for economic development that was introduced almost fifty years ago and is nowadays employed in a large number of countries. While the number of EPZs including several variants such as Special Economic Zone (SEZs) has increased continuously, general interest in EPZs has declined over the years in contrast to earlier heated debates regarding the efficacy of the strategy and its welfare effects especially on women workers. This article re-evaluates the historical trajectories and outstanding labour and gender issues of EPZs on the basis of the experiences of South Korea, Bangladesh and India. The findings suggest the necessity of enlarging our analytical scope with regard to EPZs, which are inextricably connected with external employment structures, whether outside the EPZ but within the same country, or outside the EPZ and its host country altogether. Ms. S. Chatterjee (2008) explored that SEZs have occupied a center stage in the national consciousness for the past few months due to the events unfolding in Singur and subsequently the occurrences in Nandigram (a proposed SEZ). Many economies including India have used the concept of SEZ in one or the other form to promote exports and boost economic growth. The Indian experiment began in 1965, complemented by new policies regarding exports, FDI etc to attract investments and boost exports. Since the implementation of these reforms began there has been a spate of criticisms from a number of quarters on different aspects of the SEZ policy. Some of the economic issues raised about the SEZ policy have been improper usage of arable land, food security, loss of low skilled jobs in agriculture, forestry, and small scale industries. Despite the opposition the government is determined to go ahead with rapid creation of new SEZs. At the same time the government also claims to follow a policy of economic growth that enhances both equity and efficiency. In light of these issues, this paper tries to analyse some

economic facts related to the creation and working of the SEZs in order to arrive at the ground realities which would help in effective decision making about SEZs. Sarbajit Chaudhuri and Shigemi Yabuuchi (2008) analyzed the Formation of Special Economic Zone (SEZ) using agricultural land to promote industrialization has recently been one of most controversial policy issues in many developing economies including India. This paper critically theoretically evaluates the consequences of this policy in terms of a three-sector HarrisTodaro type general equilibrium model reasonable for a developing economy. It finds that agriculture and SEZ can grow simultaneously provided the government spends more than a critical amount of resources on irrigation projects and other infrastructural development designed at improving the efficiency of land. Agricultural wage and aggregate employment in the economy may also improve owing to this policy. Saeed Khan (2008) stated that Export Processing Zones (EPZs) are an international phenomenon influencing increasing share of trade flows and employing a growing number of workers. From 176 zones across 47 countries in 1986; the number had increased to over 3,000 across 116 countries by 2003. India also favours this so in the year 2000, the government replaced the old EPZ regime by a new scheme of "Special Economic Zones" (SEZs) with several lucrative incentives/benefits that were not available in the earlier scheme. And in 2005, it enacted the SEZ Act and the SEZ Rules were notified in February 2006. The policy was expected to give a big push to exports, employment and investment in SEZs. The Ministry of Commerce and Industry claims that these zones will attract investment of about Rs 1,00,000 crore including FDI of Rs 25,000 crore and create additional 5,00,000 direct jobs, by December 2007. The promotion of SEZs is an attempt to deal with infrastructural deficiencies, procedural complexities, bureaucratic hassles and barriers raised by monetary, trade, fiscal, taxation, tariff and labour policies. These structural bottlenecks affect the investment climate adversely by increasing production and transaction costs. Since country-wide development of infrastructure is expensive and implementation of structural reforms would require time, due to given socioeconomic and political institutions, the establishment of SEZ is seen as an important strategic tool for expediting the process of industrialisation. The zones offer numerous benefits such as, (i) tax incentives, (ii) provision of standard factories/plots at low rents with extended lease period, (iii) provision of infrastructure and utilities, (iv) single window clearance, (v) simplified procedures, and (vi) exemptions from various restrictions that characterise the investment

climate in the domestic economy. These benefits definitely help businesses for conducive environment to attract local and foreign investment. The competitive advantages of zones may also be explained within the framework of the "cluster approach". Zones are industrial clusters where external economies of scale and other advantages help the operating firms in reducing costs, developing competitive production systems and attracting investment, in particular, FDI. As a result of these benefits, India started promoting SEZ with the expectation that they will provide the engine of growth to propel industrialisation. Nema, Pradeep and Pokhariyal, Pradeep(2008) investigated that Foreign direct investment (FDI) as tool to boost growth of economy has been recognized by several developing countries like Brazil, China, India, Taiwan etc. According to IMF, FDI is an international investment to obtain a lasting interest by a resident entity in one economy in an enterprise resident in another economy. It results in a long-term relationship between the direct investor and the enterprise and a significant degree of influence by the investor in the management of the enterprise including management control. FDI is usually preferred over FII as FIIs are assumed to be attracted by short term gains and tend to leave during times of trouble. In contrast to it, FDI investor cannot be pull out quickly, due to lasting interest in the investment made and hence, more stable. Developing countries though are trying to attract FDI but bulk of the FDI is still absorbed by the developed countries ($1.5 trillion in US in 2004). China and India are two Asian giants which have lately been on the forefront of FDI investments and both countries have evolved policies and implemented reforms to attract investments. This is mainly achieved through the establishment of Special Economic Zones in both the countries. This Paper is aimed at identifying the efficacy of the SEZs and their contribution towards achieving the double digit growth in both the countries. Krzysztof Gwosdz & Woyciech Jarczewski & Maciej Huculak & Krzysztof Wiederman (2008)visualized In 1994 special economic zones (SEZs) were introduced in Poland as an instrument supporting regional development. Initially, the idea was to open just a handful of zones located in single-function industrial regions affected by or exposed to structural unemployment. Investor benefits included a full income-tax holiday for a half of the special zones life (typically ten years) and exemption from real-estate taxation. Subsequently, the initial conditions were considerably modified under the influence of various pressure groups, including the European Commission, the central government, major international investors, and local

authorities. The tax benefits were reduced, but the eligibility was extended to new industries and new company types while the overall number of special zones consistently increased. With more than 150 locations enjoying a special status, the SEZs have lost their nature of regional policy tools, almost becoming standard forms of public aid for companies, regardless of their location. This shift in the approach to the special zones had a fundamental impact on the effects generated by the special zones. The investor appeal of areas where state support was essential to overcome a structural economic crisis was further undermined. Indeed, the bulk of investment and jobs was channeled to the zones comfortably located in southwestern Poland near large urban agglomerations with a labor market that was attractive to the investors (the Katowicka, Legnicka, and Wabrzyska zones). However, few large and middle-sized investments were acquired by single-function industrial areas in crisis (Starachowicka and Tarnobrzeska SEZs) or by peripheral agricultural regions (Warmisko-Mazurska i Suwalska SEZs). A notable exception to this rule is the first Polish special zone in Mielec: although peripherally located, it achieved success using the first-comer advantage it had over the subsequent zones. John Litwack & Yingyi Qian (2009) developed a theory for a transition economy under which an unbalanced development strategy that favors special economic zones emerges as a response to two critical problems: (1) political pressure to satisfy certain social expenditure requirements, and (2) the lack of institutions to constrain the state from expropriation. By promoting the concentration of resources in some areas, a low equilibrium trap can be avoided, while important spillover effects may be generated elsewhere. The experience of China with special economic zones and coastal open areas is interpreted in this light. Some problems in the Russian economy are also discussed in the context of this theory Laura Alfaro and Lakshmi Iyer (2009) visualized in 2005, the government of India enacted the Special Economic Zones (SEZ) Act in order to attract investment, generate export revenues and create manufacturing jobs. However, several planned projects faced difficulties in acquiring land for setting up the SEZ. In December 2007, the government introduced a new piece of legislation, which proposed to extend the power of eminent domain to allow the government to acquire land for SEZs. Was this the right response to the land acquisition problems of private firms? Was the SEZ strategy the right one for India's economic growth? Creskoff, Stephen & Walkenhorst, Peter (2009) described many developing countries operate geographically delineated economic areas in the form of export processing zones, special

industrial zones, or free trade zones. This paper provides an overview of the application of World Trade Organization disciplines to incentive programs typically employed by developing countries in connection with such special economic zone programs. The analysis finds that the disciplines under the Agreement on Subsidies and Countervailing Measures have the most immediate relevance for middle-income World Trade Organization members that are not exempt for certain"grandfathered"programs, but will also concern other developing countries in the future, as their exemption expires or their per-capita income passes a threshold of US$1,000. Incentives related to special economic zones can be broadly grouped into three categories: (i) measures that are consistent with the World Trade Organization, notably exemptions from duties and taxes on goods exported from special economic zones; (ii) measures that are prohibited or subject to challenge under World Trade Organization law, notably export subsidies and import substitution or domestic content subsidies; and (iii) and measures where World Trade Orgainzation consistency depends on the facts of the particular case. The paper provides a set of recommendations on how to eliminate questionable incentives. The single most important zone policy reform to achieve World Trade Organization compliance is to remove all requirements to export and permit importation of goods manufactured in special economic zones into the national customs territory without any restrictions other than the application of import duties and taxes. Kari Liutho (2009) analyzed approximately 20 special economic zones (SEZs) have been founded in Russia. Four of them are innovation zones, two manufacturing zones, seven tourism zones, three port zones and two old zones of the 1990's, namely the Kaliningrad SEZ and the Magadan SEZ. Additionally, four gambling zones are to be opened by July 2009. The Russian SEZs currently produce more plans than results i.e. unrealistic plans characterise the contemporary Russian SEZs. Only the Kaliningrad SEZ and the Magadan SEZ can be classified as fully operational, and therefore, it is far too early to make any firm conclusion on the economic impact of these zones on the Russian economy. On the other hand, it is highly recommendable that a follow-up of the Russian SEZs will be carried out in 3-5 years from now, since the results of today do not necessarily describe the potential of tomorrow. Norifumi Kawai (2009)explored that the goal of this study is to examine the determinants of the industrial location of Japanese manufacturing foreign direct investment (FDI) in China for the period from 1998 to 2006 at the provincial level. We stress that the determinants of FDI strategies cannot be tested sufficiently without a fine-grained analysis of the

association between institutions and organizations. In an extension of institution theory, we identified that institutions such as special economic zones (SEZs), a greater degree of protection of intellectual property rights, and the weak concentration of state-owned enterprises (SOEs) act as crucial determinants of recruiting Japanese manufacturing FDI.

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