The effects of special economic zone on automotive sector in Campania

Special Economic Zones (SEZs) are instruments of economic policy designed to stimulate investment and local production through tax incentives and administrative simplifications. This study examines the impact of the Campania SEZ, established in 2018, on firms operating in the automotive sector, estimating both the direct effects on firms located within the SEZ perimeter and the potential spillover effects on firms in the surrounding areas. Three groups are distinguished: Core firms, located in the municipalities included in the Campania SEZ; Spillover firms, located within 25 km of the SEZ boundary; Control firms, located beyond this threshold, serving as the pure comparison group. The empirical strategy combines Propensity Score Matching — to ensure structural comparability across groups prior to policy introduction — with a Difference-in-Differences model including firm and year fixed effects, estimated on AIDA panel data for the period 2015–2021. The dependent variable is the value of production. Preliminary findings indicate a positive and statistically significant direct effect at the 5% level on Core firms in the post-2018 period relative to the control group. The spillover effect on firms in the surrounding areas is instead negative and statistically insignificant. The event study confirms the parallel trends assumption in the pre-policy period and documents a positive dynamics of Core effects in 2018 and 2019, followed by a contraction in 2020 — attributable to the COVID-19 pandemic shock — and a significant recovery in 2021. The results suggest that the Campania SEZ has generated direct benefits for automotive firms located within its boundaries, without producing measurable positive externalities in the surrounding areas.