Investigating obstacles and enabling located firms in special economic Essay

Investigating obstacles and enabling located firms in special economic zones - Essay Example The â€Å"special economic zone† (SEZ) is another term used to refer to the formation of modern economic region. In line with this, governments worldwide normally promote the development of SEZs in order to increase the chances wherein the country could experience increase not only in intra-regional and international trade activities but also the inflows of foreign investments and creation of new job opportunities for the local people (Wang, 2013; Brautigam and Xiaoyang, 2011). In the process of improving transportation infrastructure that connects the SEZs to the local market (Baissac, 2011, pp. 24 – 25), ports, and airports, more local and foreign investors will become more attracted in investing in SEZs. Companies that operate in SEZs are normally given special business incentives like duty-free imports, tax holidays, the benefit of having a more simplified procedure when dealing with the customs (FIAS, 2008, p. 2) or reduction in import taxes for foreign-based companies (Gunawardana and Sisombat, 2008). Since each type of SEZ is being governed by a different set of policies and rules particularly when it comes to taxation and conditions on investment and international trading (Dobrogonov and Farole, 2012, p. 5; Baissac, 2011, p. 23), this study aims to focus on analyzing the case of Savan-Seno Special Economic Zone (SASEZ) in Savannakhet Province in Laos. As such, the rationale for zone development will be tackled in details followed by discussing the geographical, economical, and international trade factors that can affect the performance of SASEZ. In relation to geographical, economical, and international trades, this study aims to identify the determinants of FDI, participation strategies used by foreign investors, and the common challenges these firms would normally encounter in SASEZ. The main objective of this study is to identify all geographic, economic, and international trade factors that