01 Evaluating SEZ's Custom Performance: Evidence from Shahid Rajaee Port

Some of Special Economic Zones (SEZ) are the main locations for world trades. Shanghai (China) and Jebel Ali (Dubai) are two of most successful ones. Even though Iran has established more than 15 SEZs since the 90s and even more are on the way, their performance is highly doubted. The SEZ’s performance could be either due to their design, or, due to macro structure of the economy. Using a Difference in Difference (DiD) framework, we control for the overall performance of the economy and address the effect of SEZ establishment on Shahid Rajaee custom trade performance. Among about 20 SEZs, Shahid Rajaee is chosen because of its large trade volume, all-purpose targeting, and available data prior to being treated. Our data is disaggregated into 6digits of HS tariff codes, provided by Iran’s Custom. Our findings show that overall impact is significantly positive both on exports and imports; however, the impact on imports is about six-fold larger. A stronger pattern exists in some sections; i.e. plastic, chemicals, electrical machinery (including homeware) and transportation (including vehicles). The results are robust to many robustness tests.