Can the Founding of Free Trade Zones Lead to Financial Employment Boom? --Based on Multi-period Double-difference model

Abstract

The establishment of Free Trade Zones (FTZs) aims to enhance trade liberalization and financial openness, fostering economic growth and financial employment development. Inspired by panel data from 287 prefecture-level cities in China spanning from 2006 to 2019, the study explores the repercussions of FTZs on financial employment using a multi-period double-difference model. The research finds that FTZs have promoted the prosperity of financial employment in local and surrounding areas, the conclusion is upheld by a battery of robustness tests. Mechanism tests show that FTZs significantly promote financial employment prosperity from two perspectives: promoting overall industrial structure upgrading and enhancing the level of marketization. Heterogeneity analysis further reveals that FTZs have a more significant positive repercussions on the prosperity of financial employment in the middle and western regions, indicating that FTZ policies help balance regional development. This paper provides important references for policymakers to implement market reforms, adjust regional development strategies, and promote inter-sectoral cooperation, thereby facilitating the positive impact of free trade zone policies on financial employment.