Unraveling the Impact of Special Economic Zones (SEZs) on Industrial Growth

Special Economic Zones (SEZs) are designed to stimulate economic development through high value-added industries a strategy highly relevant for Palu a city grappling with deindustrialization The Palu SEZ was established to promote industrial growth facilitate reindustrialization efforts However its implementation is constrained by challenges including limited investor engagement inadequate infrastructure This study assesses the impact of the Palu SEZ on industrial growth using a quasi-experimental Difference-in-Differences (DiD) methodology leveraging macroeconomic data from regencies in Central Sulawesi Province to control for confounding factors The results indicate that the Palu SEZ has not yet significantly influenced industrial sector growth a finding that contrasts with prior studies reporting positive impacts of SEZs on other economic indicators.