SEZ Development in Cambodia, Thailand and Vietnam and the regional value chains

Special economic zones (SEZ) in some East Asian economies over recent decades have been considered to be a successful experience. In some cases, the SEZ are seen as an important tool to attract foreign direct investment. The regional production network among the Southeast Asian countries has become more sophisticated and intensified with the multinational corporations’ involvement. Changes in the pattern of international trade, with more intermediate inputs, have engaged these economies into the global value chains. We argue that the success of the SEZ development in Cambodia, Thailand, and Vietnam can be warranted if they are more spatially connected across the borders, and the linkages between firms across the SEZ are more associated with the supply chains. In addition, our analysis in the case of Cambodia shows no strong evidence for a strong link between the SEZ development and the attraction of foreign direct investment.